What is the SEC?
submitted by Peg Leyge

CrumbleCake

It stands for Securities and Exchange Commission. They're basically in charge of regulating investment activity in the U.S. They make rules and enforce rules.

For example, they have rules against "insider trading," which allows investors to get an unfair advantage by receiving sensitive information from acquaintances inside publicly traded companies. So, if your cousin works at a big corporation and you know they're about to make a change that will significantly increase the value of their stock, you would be able to buy up a bunch of that company's stock before the change happens. This wouldn't be fair to other investors that don't have inside contacts, so the SEC makes sure this doesn't happen.