Roles of SEC and CFTC in high risk gambling The Securities and Exchange Commission (SEC) is a regulatory agency responsible for administering the U.S. laws regarding securities. The purpose of these laws is to ensure fair markets and to provide accurate information to investors. The major securities laws were enacted in the 1930s after the 1929 stock market crash and the anemic performance of the market in the early 1930s. Congress has passed the Securities Act of 1933 to regulate the primary market the market for new securities. Sometimes called the "truth in issuance act," the 1933 act required a company to submit independently verified financial information, a registration statement, and a prospectus to the Federal Trade Commission. The Securities and Exchange Act of 1934 created the Securities Exchange Commission, giving it the power to regulate the stock exchanges and the trading practices of the secondary market a market for currently traded shares. In 1935 the Public Utility Holding Company Act was enacted to regulate all interstate holding companies a holding company controls other companies by owning their stock in the utility business. In 1940 Congress passed two laws covering the people working in the security business. The Investment Company Act of 1940 provided for the regulation of investment companies, including those involved with mutual funds. The Investment Advisers Act of 1940 established regulation of investment advisers and their activities. In 1974 the Employee Retirement Income Security Act gave the SEC jurisdiction over pension funds. Other legislation addressed foreign activities, insider trading, and further clarification of existing legislation. The SEC consists of five commissioners who are appointed by the president, only three of whom can be from the same political party. Terms are staggered; thus, each June 5, a person rotates off the Commission. To accomplish their duties, the commissioners have office staffs of accountants and lawyers and regional offices in eleven cities. In enforcing the securities laws, the SEC acts as a guide and adviser whose actions are largely remedial. One common activity of each division is rulemaking. New rules and rule modifications are usually accomplished in open meetings. Those industries or parties affected by rule changes are allowed to present their positions and make comments in an open meeting. Any SEC investigations are conducted by the Division of Enforcement and the field offices. If the evidence indicates a violation, the SEC can take administrative action (such as suspension) or instigate a civil action in an U.S. District Court. If evidence indicates a criminal action, the SEC turns the case over to the Justice Department. Congress created the Commodity Futures Trading Commission (CFTC) in 1974 as an independent agency with the mandate to regulate commodity futures and option markets in the United States. The agency's mandate has been renewed and expanded several times since then, most recently by the Dodd-Frank Wall Street Reform and Consumer Protection Act. In 1974 the majority of futures trading took place in the agricultural sector. The CFTC's history demonstrates, among other things, how the futures industry has become increasingly varied over time and today encompasses a vast array of highly complex financial futures contracts. Today, the CFTC assures the economic utility of the futures markets by encouraging their competitiveness and efficiency, protecting market participants against fraud, manipulation, and abusive trading practices, and by ensuring the financial integrity of the clearing process. Through effective oversight, the CFTC enables the futures markets to serve the important function of providing a means for price discovery and offsetting price risk. The CFTC's mission is to protect market users and the public from fraud, manipulation, abusive practices and systemic risk related to derivatives that are subject to the Commodity Exchange Act, and to foster open, competitive, and financially sound markets.