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Securities and Exchange Commission

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The United States Securities and Exchange Commission (SEC) is an independent federal agency responsible for the regulation of the nation's securities industry. The agency enforces securities laws and proposes rules. The agency was established in 1934 with the passage of the Securities Exchange Act.[1]

HIGHLIGHTS
  • The Securities and Exchange Commission (SEC) is a federal government agency responsible for the regulation of the nation's securities industry.
  • The SEC is headed by a five-member board of commissioners. Members are appointed by the president with the advice and consent of the United States Senate.
  • The SEC can only bring civil actions in a district court against violators. The SEC may, however, refer violators to state and federal prosecutors to bring criminal charges.

    • Background

    In 1933, the United States Congress passed a securities law that authorized the federal government to regulate interstate sales of securities. In 1934, Congress passed another securities law, which established the United States Securities and Exchange Commission. The commission was charged with enforcing federal securities laws and drafting regulations for the securities industry. President Franklin D. Roosevelt signed the act into law on June 6, 1934.[1][2]

    Organization

    Administrative State
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    Leadership

    The SEC is headed by a five-member board of commissioners. Members are appointed by the president with the advice and consent of the United States Senate. The president does not have the authority to remove members once they are confirmed. No more than three commissioners may belong to the same political party. The president appoints one board member to serve as chair. Commissioners serve five-year terms, which are staggered so that one member's term ends on June 5 every year. A commissioner may serve an additional 18 months if no replacement is assigned to take his or her place at the time his or her term of office ends. The table below identifies the members of the SEC board as of June 2025.[1][3]

    SEC Commissioners, June 2025
    Member Position Term started Term ends
    Paul S. Atkins Chairman 2025 2030
    Hester M. Peirce Commissioner 2018 2025
    Caroline A. Crenshaw Commissioner 2020 2024
    Mark T. Uyeda Commissioner 2022 2028
    Vacant Commissioner 2027
    Source: Securities and Exchange Commission

    Divisions

    The SEC comprises six divisions, each responsible for different tasks. The six divisions are as follows:[4]

    • Corporation Finance, which is responsible for overseeing disclosures and transaction registrations made by public companies.
    • Economic and Risk Analysis, which collects and uses economic data to advise other divisions.
    • Enforcement, which works with the other divisions to investigate violations of securities laws.
    • Examinations, which conducts the SEC's National Exam Program.
    • Investment Management, which is responsible for overseeing investment companies and advisers.
    • Trading and Markets, which responsible for overseeing self-regulatory organizations, such as broker-dealer firms and investment houses.

    Authority and responsibilities

    The SEC has authority to regulate the securities industry. This includes the authority to draft regulations for the industry. SEC regulations include requiring brokers to disclose financial information about the securities they offer to the public. In addition, the SEC has the power to enforce federal securities laws. The Enforcement Division of the SEC is tasked with investigating allegations of violations and bringing action against violators. The SEC can only bring civil action in a district court against violators. The SEC may refer violators to state and federal prosecutors to bring criminal charges.[1][2]

    Noteworthy events

    SCOTUS rules against SEC’s administrative proceedings for seeking penalties for securities fraud (2024)

    The U.S. Supreme Court ruled 6-3 on June 27, 2024, in Securities and Exchange Commission v. Jarkesy, holding that when the Securities and Exchange Commission (SEC) seeks civil penalties against defendants for securities fraud the defendant is entitled to a trial by jury under the Seventh Amendment.

    Chief Justice John Roberts delivered the opinion of the court, arguing that the SEC’s adjudication and enforcement proceedings for securities fraud penalties violate the separation of powers and the defendant’s Seventh Amendment right to a jury trial: “A defendant facing a fraud suit has the right to be tried by a jury of his peers before a neutral adjudicator. Rather than recognize that right, the dissent would permit Congress to concentrate the roles of prosecutor, judge, and jury in the hands of the Executive Branch. That is the very opposite of the separation of powers that the Constitution demands.”

    Justice Sonia Sotomayor filed a dissenting opinion, joined by Justices Elena Kagan and Ketanji Brown Jackson, arguing that the majority’s opinion threatens the separation of powers and does not align with court precedent: “Beyond the majority’s legal errors, its ruling reveals a far more fundamental problem: This Court’s repeated failure to appreciate that its decisions can threaten the separation of powers. … The majority today upends longstanding precedent and the established practice of its coequal partners in our tripartite system of Government. Because the Court fails to act as a neutral umpire when it rewrites established rules in the manner it does today, I respectfully dissent.”[5]

    See also

    External links

    Footnotes

    1. ↑ 1.0 1.1 1.2 1.3 Securities and Exchange Commission, "What We Do," accessed January 29, 2017
    2. ↑ 2.0 2.1 Securities and Exchange Commission, "The Laws That Govern the Securities Industry," accessed January 29, 2017
    3. ↑ Securities and Exchange Commission, "Current SEC Commissioners," accessed June 17, 2025
    4. ↑ Securities and Exchange Commission, "Headquarters Divisions and Offices," accessed February 26, 2024
    5. ↑ SCOTUSblog, "Securities and Exchange Commission v. Jarkesy," accessed July 2, 2024
    v • e
    The Administrative State
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    Pillars
    Reporting
    Laws
    Administrative Procedure Act • Antiquities Act • Civil Service Reform Act • Clayton Antitrust Act • Communications Act of 1934 • Congressional Review Act • Electronic Freedom of Information Act • Federal Food, Drug, and Cosmetic Act of 1938 • Federal Housekeeping Statute • Federal Reserve Act • Federal Trade Commission Act of 1914 • Freedom of Information Act • Government in the Sunshine Act • Independent Offices Appropriations Act of 1952 • Information Quality Act • Interstate Commerce Act • National Labor Relations Act • Paperwork Reduction Act • Pendleton Act • Privacy Act of 1974 • Regulatory Flexibility Act • REINS Act • REINS Act (Wisconsin) • Securities Act of 1933 • Securities Exchange Act of 1934 • Sherman Antitrust Act • Small Business Regulatory Enforcement Fairness Act • Truth in Regulating Act • Unfunded Mandates Reform Act
    Cases
    Abbott Laboratories v. Gardner • A.L.A. Schechter Poultry Corp. v. United States • Association of Data Processing Service Organizations v. Camp • Auer v. Robbins • Chevron v. Natural Resources Defense Council • Citizens to Preserve Overton Park v. Volpe • Federal Trade Commission (FTC) v. Standard Oil Company of California • Field v. Clark • Food and Drug Administration v. Brown and Williamson Tobacco Corporation • Humphrey's Executor v. United States • Immigration and Naturalization Service (INS) v. Chadha • J.W. Hampton Jr. & Company v. United States • Lucia v. SEC • Marshall v. Barlow's • Massachusetts v. Environmental Protection Agency • Mistretta v. United States • National Federation of Independent Business (NFIB) v. Sebelius • National Labor Relations Board v. Noel Canning Company • National Labor Relations Board v. Sears, Roebuck & Co. • Panama Refining Co. v. Ryan • Securities and Exchange Commission v. Chenery Corporation • Skidmore v. Swift & Co. • United States v. Lopez • United States v. Western Pacific Railroad Co. • Universal Camera Corporation v. National Labor Relations Board • Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council • Wayman v. Southard • Weyerhaeuser Company v. United States Fish and Wildlife Service • Whitman v. American Trucking Associations • Wickard v. Filburn • Wiener v. United States
    Terms
    Adjudication (administrative state) • Administrative judge • Administrative law • Administrative law judge • Administrative state • Arbitrary-or-capricious test • Auer deference • Barrier to entry • Bootleggers and Baptists • Chevron deference (doctrine) • Civil servant • Civil service • Code of Federal Regulations • Codify (administrative state) • Comment period • Compliance costs • Congressional Record • Coordination (administrative state) • Deference (administrative state) • Direct and indirect costs (administrative state) • Enabling statute • Ex parte communication (administrative state) • Executive agency • Federal law • Federal Register • Federalism • Final rule • Formal rulemaking • Formalism (law) • Functionalism (law) • Guidance (administrative state) • Hybrid rulemaking • Incorporation by reference • Independent federal agency • Informal rulemaking • Joint resolution of disapproval (administrative state) • Major rule • Negotiated rulemaking • Nondelegation doctrine • OIRA prompt letter • Organic statute • Pragmatism (law) • Precautionary principle • Promulgate • Proposed rule • Publication rulemaking • Regulatory budget • Regulatory capture • Regulatory dark matter • Regulatory impact analysis • Regulatory policy officer • Regulatory reform officer • Regulatory review • Rent seeking • Retrospective regulatory review • Risk assessment (administrative state) • Rulemaking • Separation of powers • Significant regulatory action • Skidmore deference • Statutory authority • Substantive law and procedural law • Sue and settle • Sunset provision • Unified Agenda of Federal Regulatory and Deregulatory Actions • United States Code • United States Statutes at Large
    Bibliography
    Agencies
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