Are You Protected by the SEC?

Will the SEC protect you?

They’ll certainly try, but their efforts are outgunned by corporations with bigger budgets.

To get a feel for what the Securities and Exchange Commission, an investor protection agency, faces, consider this: The 2020 SEC budget request was $1.7 billion.* By contrast, in 2018, J.P. Morgan (NYSE: JPM) spent $8.8 billion** on technology and communications, with Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS) spending $2 billion*** and $1 billion**** respectively. In comparison to the means of mutual fund behemoths like Vanguard and Blackrock, who have trillions under management plus hedge funds, those numbers are modest.

Money spent on technology is used to develop exotic new products and move information in ways and at speeds beyond the SEC’s scope of influence. It’s not due to a lack of passion or intelligence. They simply suffer from mismatched resources.

Ultimately, as long as they’re outmatched, it’d be best not to put too much faith in the governances of the SEC.

David R. Evanson is a financial journalist in Philadelphia.

*Anonymous, (2020). Congressional Budget Justification Annual Performance Plan. U.S. Securities and Exchange Commission. Retrieved January, 2020
**Anonymous, (2019). JP Morgan Chase & Co: Annual Report on Form 10-K. U.S. Securities and Exchange Commission. Retrieved January, 2020
***Anonymous, (2019). Morgan Stanley: Annual Report on Form 10-K. U.S. Securities and Exchange Commission. Retrieved January, 2020
****Anonymous, (2019). The Goldman Sachs Group, Inc.: Annual Report on Form 10-K. U.S. Securities and Exchange Commission. Retrieved January, 2020