Securities and Exchange Commission (SEC)

The Securities and Exchange Commission (SEC) is a federal agency that regulates securities markets and protects investors by:

The SEC enforces securities laws through civil actions against individuals and entities that violate securities laws.

The SEC promotes fair dealing and the disclosure of important market information to prevent fraud.

The SEC develops new regulations to monitor markets.

The SEC refers suspected criminal cases to the U.S. Department of Justice (DOJ) for possible criminal prosecution.

The SEC was established by Congress in the Securities Exchange Act of 1934 in response to the stock market crash of 1929. The SEC oversees securities exchanges, investment advisors, mutual funds, securities brokers, and dealers.

The SEC has five commissioners who are appointed by the President of the United States. The president also designates one of the commissioners as chairman. The SEC’s commissioners serve five-year terms, and their terms are staggered so that one commissioner’s term ends on June 5 of each year.