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How Does the U.S. Securities and Exchange Commission (SEC) Protect Investors?


Investments can always be risky. With American households owning over 59% of investments on the United States equity market, worth over $38 trillion in equity, it is more important than ever that the Securities and Exchange Commission (SEC) protect American investors and households.

Protecting the Securities of Investors

The SEC’s regulations are made with the security of investors in mind. As a result, the SEC’s Division of Investment Management oversees the investment industry and creates regulations that would benefit investors. An example of one such regulation would be the mandatory and public disclosure of relevant information before investors purchase stocks.

With the importance of protecting the securities of investors and ensuring a fair, transparent market, the SEC’s regulations are enforced tightly through a variety of enforcement mechanisms.

Enforcing Regulations

To protect investors, the SEC brings forward cases regarding investment fraud through the Department of Enforcement. Created in 1972, the Department of Enforcement enforces SEC regulations through civil lawsuits, seeking injunctions and financial damages. The SEC can also issue stop orders and other enforcement measures to protect investors.

Some common methods of SEC regulation enforcement include:

  • Injunctions and stop orders

  • Trading suspensions

  • Litigation in federal court

  • Civil lawsuits

Holding Wrongdoers Accountable

One of the most important ways the SEC protects its investors is through its accountability efforts. Their goal in holding wrongdoers accountable is to protect their investors by setting a standard for future conduct. As a result of enforcement methods, fraudsters risk financial and legal penalties, as well as a bar on their careers.

The Team at Nick Lotito & Seth Kirschenbaum

If you believe that you have investments that were not protected by the SEC or are a victim of fraud, the experienced Atlanta law offices of Nick Lotito & Seth Kirschenbaum can help you prepare a fraud tip to submit to the SEC.

We also will provide you with strong, competent counsel prepared to advocate for your protection and wellbeing. Call our team today at (404) 471-3177 or contact us online to schedule a free consultation and get started on protecting your investments.

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