Imagine you’ve started a new job at the U.S. Securities and Exchange Commission (SEC). You want to make sure, at all times, you are aware of the mission statement of your new employer, which can be found here. It says:
The U. S. Securities and Exchange Commission (SEC) has a three-part mission:
Protect investors
Maintain fair, orderly, and efficient markets
Facilitate capital formation
All of this makes sense. In fact, you feel good about the decision you have made, and you should because you know a little bit about SEC’s history already. It’s also posted right there, under the mission statement:
When the stock market crashed in October 1929, so did public confidence in the U.S. markets. Congress held hearings to identify the problems and search for solutions. Based on its findings, Congress – in the peak year of the Depression – passed the Securities Act of 1933. The following year, it passed the Securities Exchange Act of 1934, which created the SEC.
The main purposes of these laws can be reduced to two common-sense notions:
Companies offering securities for sale to the public must tell the truth about their business, the securities they are selling, and the risks involved in investing in those securities.
Those who sell and trade securities – brokers, dealers, and exchanges – must treat investors fairly and honestly.
Truthfulness… Fairness… Honesty… You have been abiding by these principles all your life, and now you are in public service, with an opportunity to make the markets work better. You can’t wait for your first assignment…
Once you have fully completed your onboarding, you receive your first assignment, one that you really like. The SEC has been critical with the crypto industry and recently put out a couple of alerts urging investors to exercise caution with crypto. The first alert is a piece from the Director of the SEC’s Office of Investor Education and Advocacy. The second is an investor alert, reiterating the message. You are asked to review these two pieces, offer some thoughts, and start drafting some bullet points for the next investor alert.
“Great,” you say to yourself. You remember actually buying into the crypto hype a little bit while in school, trading crypto and losing what was a rather significant sum of money for you at the time. “We should be out there warning investors about this stuff. Our mission, first and foremost, is protecting investors.” You are really excited that you will have an opportunity to shape the next bulletin. You also want to impress your bosses with your sound reasoning and meticulous research. You develop your plan and you intend to read as much as you can about the subject. You decide to start with the largest, most renowned investor that comes to mind, Warren Buffett…