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Securities and Exchange Commission – SEC

Definition

The U.S. Securities and Exchange Commission is an independent agency of the United States federal government. The SEC holds primary responsibility for enforcing the federal securities laws, proposing securities rules, and regulating the securities industry, the nation's stock and options exchanges, and other activities and organizations, including the electronic securities markets in the United States.

Securities and Exchange Commission - SEC

Securities and Exchange Commission is an independent institution formed by the government in line with the Securities Exchange Act of 1934.

What does SEP do?

Congress made the SEP after the Great Depression in order to ensure proper enforcement of security laws that were concerned with the protection of investors in the market. The Securities and Exchange Commission makes sure that the economy keeps regulating in a smooth and effective manner, creating more jobs, and improving the standard of living amongst people.

Why was SEP formed?

SEP was formed to make sure that no investor is denied their rights in the market. It took various steps in order to achieve what it set out for. For instance if someone wanted to sell a security, the Securities and Exchange Commission required the seller to disclose each and every information about the security. It was done so that the investors can take a decision based on fair and true knowledge of that particular security.

Furthermore, a major law that the SEC passed was that no company no matter how big, can take over another without registering the intention behind it. This made the takeovers fair, and in accordance with the growth of a prolific economy.

Another great example of the regulations of SEC is that if an investor purchases more than 5% of the total shares of a company, he is obliged to report this activity. This purchase must be reported to SEC in a period of ten days from the purchase date in order to avoid certain legal actions.

One of the basic functions of the Security and Exchange Commission is that it is very strict about the laws stated by the Congress to regulate the market. Every year, it takes down several companies that are found involved in practices like insider trading, giving out false information while selling the shares, and preparing fraudulent accounting books.

Who operates SEC?

There are five commissioners who make up the Securities and Exchange Commission. These commissioners are appointed by the President of the United States. Furthermore, they are approved by the Senate before taking over their responsibilities. To restrain from the misuse of authority, a new commissioner is appointed every year replacing the previous one. In addition to that, a maximum of three commissioners from a single political party can act as commissioners at any given point in time.


Further Reading


The role of financial economics in securities fraud cases: Applications at the Securities and Exchange Commission
www.jstor.org [PDF]
This Article illustrates how financial economics has been and can be applied in securities fraud litigation. Specifically, Mark L. Mitchell andjeffry M. Netter describe an empirical technique (event study) developed by academic financial economists, relate this event study …

Insider trading and investment analysts: an economic analysis of Dirks v. Securities and Exchange CommissionInsider trading and investment analysts: an economic analysis of Dirks v. Securities and Exchange Commission
heinonline.org [PDF]
This Article illustrates how financial economics has been and can be applied in securities fraud litigation. Specifically, Mark L. Mitchell andjeffry M. Netter describe an empirical technique (event study) developed by academic financial economists, relate this event study …

The distorting incentives facing the US securities and exchange commissionThe distorting incentives facing the US securities and exchange commission
heinonline.org [PDF]
This Article illustrates how financial economics has been and can be applied in securities fraud litigation. Specifically, Mark L. Mitchell andjeffry M. Netter describe an empirical technique (event study) developed by academic financial economists, relate this event study …

Convergence between US GAAP and IFRS: Acceptance of IFRS by the US Securities and Exchange Commission (SEC)Convergence between US GAAP and IFRS: Acceptance of IFRS by the US Securities and Exchange Commission (SEC)
www.tandfonline.com [PDF]
This Article illustrates how financial economics has been and can be applied in securities fraud litigation. Specifically, Mark L. Mitchell andjeffry M. Netter describe an empirical technique (event study) developed by academic financial economists, relate this event study …

The securities and exchange commission and corporate social transparencyThe securities and exchange commission and corporate social transparency
www.jstor.org [PDF]
This Article illustrates how financial economics has been and can be applied in securities fraud litigation. Specifically, Mark L. Mitchell andjeffry M. Netter describe an empirical technique (event study) developed by academic financial economists, relate this event study …

The law and economics of interprofessional frontier skirmishing: Financial Planning Association v. Securities and Exchange CommissionThe law and economics of interprofessional frontier skirmishing: Financial Planning Association v. Securities and Exchange Commission
heinonline.org [PDF]
This Article illustrates how financial economics has been and can be applied in securities fraud litigation. Specifically, Mark L. Mitchell andjeffry M. Netter describe an empirical technique (event study) developed by academic financial economists, relate this event study …

Regulatory Capture at the Securities and Exchange CommissionRegulatory Capture at the Securities and Exchange Commission
books.google.com [PDF]
This Article illustrates how financial economics has been and can be applied in securities fraud litigation. Specifically, Mark L. Mitchell andjeffry M. Netter describe an empirical technique (event study) developed by academic financial economists, relate this event study …

A critique of the Securities and Exchange CommissionA critique of the Securities and Exchange Commission
heinonline.org [PDF]
This Article illustrates how financial economics has been and can be applied in securities fraud litigation. Specifically, Mark L. Mitchell andjeffry M. Netter describe an empirical technique (event study) developed by academic financial economists, relate this event study …

Securities and Exchange Commission: Research, teaching and career opportunitiesSecurities and Exchange Commission: Research, teaching and career opportunities
search.proquest.com [PDF]
This Article illustrates how financial economics has been and can be applied in securities fraud litigation. Specifically, Mark L. Mitchell andjeffry M. Netter describe an empirical technique (event study) developed by academic financial economists, relate this event study …

Are bad times good news for the Securities and Exchange Commission?Are bad times good news for the Securities and Exchange Commission?
link.springer.com [PDF]
This Article illustrates how financial economics has been and can be applied in securities fraud litigation. Specifically, Mark L. Mitchell andjeffry M. Netter describe an empirical technique (event study) developed by academic financial economists, relate this event study …


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