Will The SEC Protect You?

I was appointed the finance correspondent for Senior Life Advisor, an online magazine for investors near or in retirement. The articles for Senior Life Advisor were designed to offer actionable information as well as items of interest about economics, investing and personal finance.

It will certainly try.  But the Securities and Exchange Commission is outgunned. In the extreme.  

To get a feel for what the investor protection agency faces consider this: The 2020 SEC budget request was $1.7 billion.  By contrast, in 2018, J.P. Morgan spent $8.8 billion on technology and communications, Morgan Stanley $2 billion and Goldman Sachs $1 billion.  And this doesn’t include mutual fund behemoths like Vanguard and Blackrock with trillions under management plus hedge funds and large global players like Barclays that operate in the United States.  

Money spent on technology is used to develop exotic new products and move information in ways and at speeds the SEC is challenged to understand much less regulate.  It’s not because they don’t want to, and not because their people aren’t smart, but because of mismatched resources.  If you believe you are protected by the SEC, that’s a fair notion, but better to operate as if you weren’t.  


MS: https://www.sec.gov/Archives/edgar/data/895421/000119312519051943/d707577d10k.htm#rom707577_26

GS: https://www.sec.gov/Archives/edgar/data/886982/000119312519050198/d669877d10k.htm#toc669877_48

JPM: https://www.sec.gov/ix?doc=/Archives/edgar/data/19617/000001961719000054/corp10k2018.htm#s0CB7F24D70885108965468B0F7390AE2

SEC Budget: https://www.sec.gov/files/secfy20congbudgjust_0.pdf#page=17

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