The SEC and the Public Interest
"Throughout most of its 44-year history, the Securities and Exchange Commission enjoyed a reputation as one of the government's most effective and admired agencies; widely regarded by the public as dynamic, vigilant, productive, and unbeholden to either politicians or the securities industry," according to an article in Business Week. "Today, however, a lot fewer people view the agency that way, and increasingly it is under attack for moving farther and farther away from its traditional watchdog role and becoming, instead, an activist in forcing change—not only in the securities industry but in the corporate boardrooms as well."
However, the role of the SEC in the changes that are occurring in the securities industry is viewed very differently by the authors of this significant study. The authors conclude that the role of the SEC is best viewed as that of a broker balancing out the strongly competing groups in the securities industry.
The book addresses the premises on which the SEC was founded to determine the extent to which they still apply in today's trading and disclosure environment. Following their review of the historical development of the SEC and an examination of some recent and pending issues facing the commission, the authors consider three particular areas in depth: the deregulation of fixed commission rates, the development of a national market system, and the corporate disclosure system. All three are fundamental to the basic mandate of the commission but nevertheless illustrate the growing power and activity of the agency in areas that previously had been left entirely to the private sector for innovative development.
Looking ahead, the book identifies some of the specific issues arising from these three areas of concern that the SEC is expected to face in coming years. As its authors state, "We have made a strong case in this book that the SEC administers should be judged in terms of their costs and benefits and that many of the SEC's regulations are antiquated in today's trading environment."
—Roderick M. Hills, Chairman, 1975-1977, Securities and Exchange Commission
—Fischer Black, Professor, Sloan School of Management, MIT