EPGD Law Tax Law

The Securities and Exchange Commission (“SEC”) is an independent government agency created to regulate corporate securities while maintaining fair market practices. The SEC is commanded by a five-member commission who act cooperatively to enforce the rules and regulations that make up the securities market.  Their authority is derived from the Securities Act of 1933 and the Securities Exchange Act of 1934.

According to SEC.gov, the five-member commission oversees approximately $82 trillion in securities trading annually on U.S. equity markets and approximately $40 trillion in the U.S. fixed income market. No company is permitted to offer or sell securities unless the securities are registered with the SEC or an exemption from registration is obtainable. Market participants including brokers, dealers and transfer agents are among those who are required to register with the commission and file updated disclosure documents on a routine basis.

Nationally, the SEC oversees 21 national security exchanges such as the New York Stock Exchange and the Nasdaq Stock Market. There are over 26,000 registered market participants at the moment, and the SEC maintains oversight on all of their activities, including the actions of their nearly one million employees.

Who Does the SEC Protect?

The SEC protects against fraudulent activities that may become apparent in the trading market. In order to maintain a fair and equitable marketplace for investors, the commission strictly prohibits insider trading that deals with buying or selling information that has not been disclosed to the public. In addition to insider trading, the sale of any kind of security without proper registration is forbidden, and the misrepresentation or omission of any material information regarding securities is not a permissible practice. So long as investors remain safeguarded against fraudulent and illegal schemes, the market will facilitate investment and prosper a capital market.

What Happens When the SEC Investigates?

If the SEC ever finds the need to conduct an investigation against a market participant, the commission will do so in a confidential manner so that evidence may be preserved, and companies can have their reputations protected while under investigation. Furthermore, the SEC will generally not notify the company that an investigation is underway, nor will they announce the existence of any particular suspicions. The only instance an investigation will become known to the public is when the matter itself becomes public record; this occurs when the SEC has filed an administrative action against the company.

EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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Eric Gros-Dubois

Eric P. Gros-Dubois founded EPGD Business Law in 2013 and is the current head of the firm’s corporate, estate planning, and tax practice, and manages the firm’s Washington D.C. office. With a JD and MBA, and a specialization in finance, Eric is able to step back and view the legal world through a commercial lens while also acting as a trusted business advisor for his clients. He does his best to be solutions oriented, and tries to think like a business owner, not just a lawyer.


*The following comments are not intended to be treated as legal advice. The answer to your question is limited to the basic facts presented. Additional details may heavily alter our assessment and change the answer provided. For a more thorough review of your question please contact our office for a consultation.

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