Edited by Barry Rider
Chapter 57: Civil enforcement in the United States securities and banking industries
To protect consumers and investors, various federal and state agencies share powerful tools to enforce the rules and regulations governing the banking and securities industries and their practices. This chapter introduces the main authorities responsible for the creation and civil enforcement of banking and securities laws, canvasses the wide range of regulated conduct, and provides examples of how civil enforcement authority is employed and the consequences of civil enforcement actions. Securities regulation refers to the body of rules, regulations, and laws that govern securities transactions, including both the marketing of securities and the reporting and disclosure obligations of issuers of US-traded securities. A security is a complex investment instrument that represents an interest in something else, such as a company. Millions of ordinary US citizens invest their savings in securities. Unfortunately, securities transactions are susceptible to fraud and manipulation. Consumer protection, along with the promotion of overall stability, fairness, and confidence in the securities markets, are the primary goals of securities regulation. Securities are regulated at the federal and state levels, and by self-regulatory organizations (“SROs”), the largest of which is the Financial Industry Regulatory Authority (“FINRA”). At the federal level, the Securities and Exchange Commission (“SEC”) is primarily responsible for the civil enforcement of securities laws. At the individual state level, each state’s attorney general is primarily responsible for enforcing that state’s securities laws.Federal securities laws are comprised of a variety of Acts and their amendments.
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