The Securities and Financial Fraud Unit of the Federal Government focuses on the investigation and prosecution of allegations relating to the operation of the country’s securities and commodities markets, including all varieties of securities fraud, insider trading, market manipulation schemes, accounting and regulatory reporting frauds, and penny stock “pump and dump” schemes. During the investigation and prosecution of these cases regulatory agencies such as the Securities and Exchange Commission (SEC), the Commodity Futures Trade Commission (CFTC) and the FBI play an integral role.
Congress created the Securities and Exchange Commission also known as the SEC. The SEC has authority over all aspects of the securities industry. This includes the power to register, regulate, and oversee the nation’s brokerage firms, agents and the various securities exchanges including the New York Stock Exchange and the NASDAQ Stock Market. Securities laws and regulations identify and prohibit certain types of conduct in the markets and provide the SEC with disciplinary powers over regulated entities and persons.
The SEC requires periodic reporting of information by companies with publicly traded securities. Companies with more than $10 million in assets whose securities are held by more than 500 owners must file annual and other periodic reports which are available to the public. These public filings are significant events for companies and the public who rely on the disclosures.
On July 30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002, which he characterized as “the most far reaching reforms of American business practices since the time of Franklin Delano Roosevelt.” The Act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud.