Established in 1934, this independent agency of the U.S. government holds regulatory authority over the securities industry. Its primary mission involves protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. The agency enforces federal securities laws, proposes new rules, and oversees securities markets and participants, including brokerage firms, exchanges, and investment advisors. For example, it might investigate insider trading or fraudulent accounting practices within publicly traded companies.
Its creation was a direct response to the stock market crash of 1929 and the subsequent Great Depression. A key benefit of the agency’s oversight is the promotion of public trust in the financial markets. This trust encourages investment, which, in turn, fuels economic growth. Historically, the agency has played a vital role in restoring confidence in the American financial system following periods of economic turmoil and market manipulation.
