Securities and Exchange Commission (SEC): A government agency responsible for the supervision and regulation of the securities industry.

The United States Securities and Exchange Commission (commonly known as the SEC) is a United States government agency having primary responsibility for enforcing the Federal securities laws and regulating the securities industry. The SEC was created by section 4 of the Securities Exchange Act of 1934 (now codified as 15 U.S.C. § 78d). In addition to the 1934 Act that created it, the SEC enforces the Securities Act of 1933, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, the Sarbanes-Oxley Act of 2002 and other statutes. Appointed by George W. Bush, Christopher Cox is the current chairman of the SEC. President Franklin Delano Roosevelt appointed Joseph P. Kennedy, Sr, father of future President John F. Kennedy, to serve as the first Chairman of the SEC. For a full list of SEC chairs and commissioners, see: Securities and Exchange Commission appointees. Overview The SEC was established by the Congress in 1934 as an independent, non-partisan, quasi-judicial regulatory agency following years of depression caused by the Great Crash of 1929. The main charter of the SEC was to enforce newly enacted federal securities laws in order to restore and uphold public confidence in the capital markets. [1] Currently, SEC is responsible for administering seven major laws that governs the securities industry. They are: Securities Act of 1933, Securities Exchange Act of 1934, Public Utility Holding Company Act of 1935, Trust Indenture Act of 1939, Investment Company Act of 1940, Investment Advisers Act of 1940 and, most recently, Sarbanes-Oxley Act of 2002. The enforcement authority given by Congress allows the SEC to bring civil enforcement against individuals or companies found to have committed accounting fraud, provided false information, engaged in insider trading or violations of other provision of the securities law. The SEC also works with criminal law enforcement agencies to prosecute individuals and companies alike for severe offenses. To achieve its mandate, the SEC requires that public companies submit quarterly and annual reports, as well as other periodic reports. As part of the annual reporting requirement, the company's top management must provide a narrative account in addition to the numbers called the "management discussion and analysis" which provides an overview of the previous year of operations and how the company fared in that time period. Management will usually also touch on the upcoming year, outlining future goals and approaches to new projects. In an attempt to level the playing field for all investors, the SEC maintains an online database called EDGAR (the Electronic Data Gathering, Analysis, and Retrieval system) online from which investors can access this information. Quarterly and annual reports from public companies are crucial for investors to make sound decisions when investing in the capital markets. Unlike banking, investment in the capital markets is not guaranteed by the federal government. The potential for big gains needs to be weighed against equally likely losses. Mandated disclosure of financial and other information gives private individuals as well as large institutions the same basic facts about public companies they invest in, increasing public scrutiny while reducing insider trading and fraud. SEC makes reports available to the public via the EDGAR system. SEC also offers publications on investment-related topics for public education. The same online system also takes tips and complaints from investors to help SEC track down non-conforming companies.