Assessing the SEC’s Role As Enforcer Against Financial Misconduct

The Securities Exchange Act grants the SEC ample authority and discretion to investigate and seek sanctions related to violations of the securities laws, with the goal of protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation (SEC, 2013).[1] To be sure, this is the SEC’s stated objective. Like most regulatory agencies, though, the SEC is subject to resource constraints – as well as to pressures from both the political and business spheres, which might steer it away from the fulfillment of its mission.

We directly assess the SEC’s objectives, as revealed by the observed SEC regulatory policies, … Read more