How does the SEC affect the US economy?
Answer:
Its ostensible purpose is to protect investors. In reality, the protection is rather limited. Investors perceive protection and are more willing to invest, which provides capital for investment in the economy. Whether that perceived protection actually exists is rather debatable. On the other side of the coin, it creates a huge amount of unnecessary work for lawyers and accountants. Lawyers and accountants are the biggest beneficiaries of the SEC. The costs of those professionals are then passed on to shareholders. Further, those smart lawyers and accountants are diverted from doing more important work that would benefit the economy in other, more material ways. The costs imposed on small companies due to the adoption of the Sarbanes-Oxley Act of 2002 have resulted in a lot of those companies going private to avoid those additional costs. That reduces their availability to obtain capital from investors which hurts the efficiency of the economy.
The SEC set standers of open and fair trading of stocks and bonds along as other security's.
Al so they keep people from insider trading and unjust enrichment.
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