Securities and Exchange Commission (SEC)
Overview
Created in 1934 following the 1929 stock market crash, the Securities and Exchange Commission (SEC) is a federal agency responsible for regulating the sale and purchase of securities (tradeable financial assets such as stocks and bonds). It's also tasked with creating and maintaining reporting requirements for public companies, overseeing market participants (brokers, advisers, exchanges), and more.
The commission itself is composed of five commissioners appointed by the president and confirmed by the Senate. No more than three commissioners can be from the same political party, and one of them serves as the SEC chair. Their stated mission is to protect investors, maintain fair, orderly, and efficient markets, and help businesses raise money.
The agency's role and scope have expanded in the years since its creation, with more aggressive regulations coming out of financial crises like the Great Recession of 2008. The SEC only has civil enforcement power (think: fines, penalties, industry bans)—meaning when a case warrants criminal charges, it refers the matter to the Department of Justice. The extent of the SEC's oversight is a highly politicized issue: Conservative politicians tend to advocate for less oversight, while more liberal politicians push for more.
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