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What is the Securities and Exchange Commission’s Division of Corporation Finance, and what does it have to do with a basic bargain?

Let me take you back to the 1920s. This was a remarkable time in the United States, with industrialization on the rise, and mass production of automobiles on our roads.

There was something missing, though: Federal laws that protect investors. Investors in those days were getting flimflammed by hucksters, fraudsters, scam artists, and Ponzi schemes.

After the Great Depression began, to protect the investing public, President Franklin Roosevelt and Congress enacted what Roosevelt called the “Truth in Securities Act.”

That was the Securities Act of 1933. And in essence, this law established a basic bargain in our capital markets. So you see, investors get to decide what risks they take, so long as public companies raising money from the public make what Roosevelt called “complete and truthful disclosure.”

A year later, Congress enacted laws to create our agency to regulate the exchanges and intermediaries in the middle of the market, strengthen the antifraud rules, and yes, oversee this basic bargain.

Under the securities laws, the SEC is merit neutral. We don’t take a view on whether or not investors should invest in particular companies. Our role is to see that you, as investors, get that “complete and truthful disclosure” Roosevelt talked about—so you can make informed investment decisions and decide what risks to take.

Since the SEC’s founding, the Division of Corporation Finance has overseen this basic bargain.

The Division does so by helping to ensure that investors receive full, fair, and truthful disclosures.

That’s periodic disclosure—in annual and quarterly reports. That’s current reporting—when issuers disclose that material events occurred. That’s disclosures when companies first go public. That’s disclosures for mergers or tender offers. That’s disclosure about things like executive compensation and the boards of directors, and information for you to consider when voting during proxy season.

The Division’s disclosure review team reviews filings, answers questions, and provides guidance to the issuers—including small businesses—raising capital and navigating their obligations to report material information.

The Division also makes recommendations to our five-member Commission on updates to our rules, including disclosure rules, given the rapidly evolving technology, and business models.

That’s some of the work that this remarkable team—more than 400 public servants—does to oversee and maintain this basic bargain. That helps investors and issuers alike.