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United States Securities and Exchange Commission


The United States Securities and Exchange Commission was created to protect investors, and to ensure that the stock market is operated in a fair and orderly manner. The market should always operate with the highest degree of efficiency. More than ever before, consumers have turned to the stock market when they want to invest their money for future security, to pay for a home, to send their children to college, and to have funds set aside for unexpected events. It's essential that strict regulations are in place in order to protect consumers. Divisions of the SEC include corporation finance, trading and markets, enforcement, and risk and strategy.

During a period in our history when the economic climate was as bad as it has ever been, the United States Securities and Exchange Commission was created. Before the Great Stock Market Crash of 1929, there wasn't much support for the government to regulate the stock market and how securities were traded. Trading increased drastically after World War I. At the time, no one seriously considered any financial disclosures, or any other means to prevent stocks being sold by fraudulent means. It's also the responsibility of the SEC to interpret the federal laws regarding securities. It should issue new rules and amend current rules when necessary. The SEC must inspect securities firms, brokers, investment advisors, and agencies involved in ratings, when necessary.

The huge amounts of money that were lost during the Great Depression caused changes to be made, and the United States Securities and Exchange Commission came into being. People had to have their faith in the nation's economy restored, so hearings were held to determine what the problems were and how to solve them. The Securities Act that was passed in 1933, and the Securities Exchange Act of 1934, created the SEC. The laws were passed to restore consumer confidence in the stock market and to promote honest dealings on the market

The laws regarding the United States Securities and Exchange Commission have two functions. When any company is selling their stock on the market, they must be totally honest with the public about the function of their business, exactly what securities they're trading, and any risks involved with buying securities from that company. The second purpose is to treat all investors fairly. People who sell or trade securities on the market, whether they're dealers, brokers, or stock exchanges, must be honest with investors.