The Full Form of SEC in Law is Securities and Exchange Commission. Founded by Congress in 1934 as the first federal regulator of the securities markets, the U.S. Securities and Exchange Commission (SEC) is an independent federal government regulatory body tasked with safeguarding investors and ensuring fair and orderly securities markets.
Role of SEC in Law:
The SEC’s role includes approving registration statements for book-runners among underwriting firms, ensuring that businesses give complete and precise disclosures about significant financial events, including corporate takeovers, and protecting shareholders, particularly retail investors, from fraudulent and manipulative practices in the market. Before it is made available to investors, securities issued in the United States have to be registered through the SEC. To conduct businesses, financial services companies, including asset managers, consulting agencies, broker-dealers, and their professional representatives, must also register with the Securities and Exchange Commission. When an individual violates securities laws or regulations, the SEC has the right to file a civil lawsuit against them. Other than that, Criminal cases can also be sent to the U.S. Department of Justice by the SEC. Additionally, the electronic data-gathering, analysis, and retrieving database of the SEC, gives investors access to periodic financial reports, registration statements, and other securities documents.