Chapter 5

Legal Environment

Investor relations is a highly regulated activity in most of the countries. In the United States, the primary agency responsible for oversight of the stock market is the United States Securities and Exchange Commission (SEC). On the agency’s website, the SEC states its main mission is “to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.”1 To achieve these goals, the SEC oversees the federal securities laws, maintains the disclosure of financial information by publicly traded companies, and can bring enforcement actions against violators of the securities law. The SEC works in close cooperation with several other U.S. government agencies, such as the Federal Reserve ...

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