‘Securities and Exchange Commission’ is like ‘Food and Drug Administration’: the FDA has authority over both food and drugs, not the intersection, and the SEC has authority over off-exchange securities.[1]
This authority tends to de facto extend to a fair level of general authority over the conduct of any company that issues a security (i.e. almost all of them). Matt Levine[2] calls this the ‘everything is securities fraud’ theory, since the theory “your company did Bad Thing X, it didn’t disclose Bad Thing X, some people invested in your company not knowing about Bad Thing X, then Bad Thing X came out and now your company is less valuable, victimizing the poor people who invested in you” has been applied in a rather large number of cases to penalize companies for a wide variety of conduct.
Some caveats may apply e.g. commodities exchanges are regulated by the CFTC. The SEC also probably cares a lot more about fraud in publicly traded companies, since they are less likely to be owned by sophisticated investors who can defend themselves against fraud and more likely to be owned by a large number of random people who can’t. I am not a lawyer, though. Get a real lawyer before making SEC jurisdictional arguments.
Yeah, it’s the “exchange” part which seems to be missing, not the “securities” part.
‘Securities and Exchange Commission’ is like ‘Food and Drug Administration’: the FDA has authority over both food and drugs, not the intersection, and the SEC has authority over off-exchange securities.[1]
This authority tends to de facto extend to a fair level of general authority over the conduct of any company that issues a security (i.e. almost all of them). Matt Levine[2] calls this the ‘everything is securities fraud’ theory, since the theory “your company did Bad Thing X, it didn’t disclose Bad Thing X, some people invested in your company not knowing about Bad Thing X, then Bad Thing X came out and now your company is less valuable, victimizing the poor people who invested in you” has been applied in a rather large number of cases to penalize companies for a wide variety of conduct.
Some caveats may apply e.g. commodities exchanges are regulated by the CFTC. The SEC also probably cares a lot more about fraud in publicly traded companies, since they are less likely to be owned by sophisticated investors who can defend themselves against fraud and more likely to be owned by a large number of random people who can’t. I am not a lawyer, though. Get a real lawyer before making SEC jurisdictional arguments.
Levine is very, very much worth reading for sensible and often-amusing coverage of a wide variety of finance-adjacent topics.