2 UNIT EIGHT: BUSINESS ORGANIZATIONS
* Oversee the inspection of securities firms, brokers, investment advisers, and ratings agencies.
* Oversee private regulatory organizations in the securities, accounting, and auditing fields.
* Coordinate U.S. securities regulations with federal, state, and foreign authorities.
Organization of the Securities and Exchange Commission
The Securities and Exchange Commission is composed of the following divisions with the stated
• Corporate Finance: Reviews documents filed by publicly held corporations.
• Market Regulation: Oversees the major securities markets participants.
• Investment Management: Interprets laws affecting investment companies and supervises mutual fund
• Enforcement: Investigates securities violations, and recommends sanctions, if any, to be pursued and
whether they should be sought in a court or before an administrative law judge.
B. CURRENT REQUIREMENTS
The SEC now requires companies to—
• File certain information electronically so that it may be available online in the SEC’s EDGAR
(Electronic Data Gathering, Analysis, and Retrieval) database.
• Make disclosures about the potential impacts of climate change on future profitability.
C. SOURCES OF INCREASED AUTHORITY
The SEC’s authority has increased since the 1930s, most recently through—
* The Securities Enforcement Remedies and Penny Stock Reform Act of 1990—Expanded the SEC’s
enforcement options and allowed SEC administrative law judges to hear cases involving more
types of alleged securities law violations.
* The Securities Act Amendments of 1990—Authorized the SEC to seek sanctions against those who
violate foreign securities laws.
* The National Securities Markets Improvement Act of 1996—Expanded the power of the SEC to
exempt persons, securities, and transactions from the requirements of the securities laws.
* The Sarbanes-Oxley Act of 2002—Required the SEC to adopt new rules relating to corporate
disclosure requirements and created an oversight board to regulate public accounting firms.
II. The Securities Act of 1933
The Securities Act of 1933 was designed to prohibit various forms of fraud by requiring disclosure of essential
information on the issuance of securities.