The U.S. Securities and Exchange Commission, which is charged with ensuring the proper functioning of U.S. financial markets worth at minimum $18,929 billion in market capitalization (the NYSE, NASDAQ, and AMEX combined), has a paltry annual budget of just $1.321 billion.
Why paltry?
To put this in perspective:
- The SEC budget is 99.99% smaller than the markets it is supposed to protect.
- The SEC budget is equal to $1 for every $14,329 that it is charged with protecting.
- The SEC’s recent additional budgetary request amounts to an additional $0.13 for every $1,000,000 it supervises.
To further contextualize the SEC's funding, we've compared its budget to various other line-items in the U.S. federal budget.
- The SEC budget of $1.321 billion versus U.S. budget line item for:
- “Agriculture, forestry, fishing and hunting: surveys, investigations, and research” — $1.1 billion, or 16.7% smaller than the SEC budget.
- “Recreational and sporting services” — $4.2 billion, or 217.9% larger than the SEC budget.
- “Fish and wildlife service” — $1.6 billion, or 21.1% larger than the SEC budget.
- “Marshalls service” — $1.2 billion or 9.2% smaller than the SEC budget.
- “General property and records management" — $2.3 billion, or 74.1% larger than the SEC budget.
- The SEC budget of $1.321 billion is 0.03% of the entire 2013 U.S. budget of $3.803 trillion.
- The SEC budget is $1 for every $2,878.88 spent on other programs.
- The SEC budget of $1.321 billion versus key 2011 financials for just one major bank, Citigroup:
- Bank profits of $11.1 billion, equivalent to 7.4 more SECs.
- Total assets of $1,873.9 billion, equivalent to 1,417.5 more SECs.
- Net working capital of $33.8 billion, equivalent to 24.6 more SECs.
- Citi's vague net working capital line-item “other, net” is $9.3 billion, equivalent to 6.0 more SECs.
- The closest line-item to the SEC budget in Citi's financial statements is “proceeds from sales of premises and equipment, subsidiaries and affiliates, and repossessed assets,” which was $1.323 billion. Put another way, Citigroup disposed of assets last year that were worth more than the SEC’s entire budget.
- This is just one major bank in the United States and represents just 12.7% of the total assets of the United States’ largest 50 banks at $14.8 trillion
- The SEC budget of $1.321 billion versus just three investment professionals that the market regulator will ultimately be charged with overseeing under the Dodd-Frank financial reform legislation:
- Ray Dalio of Bridgewater Associates earned $3.9 billion in 2011, equivalent to 1.9 more SECs.
- Carl Icahn of Icahn Capital Management earned $2.5 billion, equivalent to 89% of another SEC.
- James Simons of Renaissance Technologies earned $2.0 billion, equivalent to 51.4% of another SEC.
21 Comments
I think you mean 19 trillion as the total value of US markets, not billion. Good article.
Hello ThisWeekInStupid,
Yea, I'm pleased that you thought the article was good. That line item is $18,929 billion which is the same as $19 trillion.
With smiles,
Jason
Hi Jason,
Enjoyed the article..would you have at idea what their budgets were 2013 & 2014 ??
Tonyk.
thank you for the info.
Hello Julian,
You are welcome! Was there a part that you found most useful?
Yours, in service,
Jason
SEC budgets are complex because they are not the only ones regulating and much of their work can be done by the self regulators-who should be required to spend more money for more staff and technology.The states could also do more but there is a continuing turf battle that hides the necessary budgets.Why does the SEC have to do any bd cases when FINRA can do them?
Hello Peter,
Thank you for weighing in with your thoughts. Unclear from your comment was whether or not you believe the SEC's budget is adequate.
Yours, in service,
Jason
The budget could be adequate if work was shifted and sro's doubled their budget.but is not adequate under the current configuration.
Hi Peter,
Thanks for clarifying your view, and for sharing it, too.
Yours, in service,
Jason
As one of the thousands of people affected by the actions of SEC, I feel I need to say that surely there is someone above the SEC. that they are answerable to, surely they cannot just take the law into their own hands without any responsibility for their actions.
IE. Paypal contacted the SEC and claimed that Traffic Monsoon is a ponzi scheme, with no investigation by SEC they get a court to rule for receivers to be appointed. Receivers step in and freeze all of Charles Schofield's assets, i.e. his business, his house, his bank a/c's - he has to sleep on his parents couch, he lost custody of his son, and this is all through paypal telling lies to SEC and the customers who phoned paypal asking if their was enough money in paypal to cover the money that they all had purchased ad packs with in Traffic Monsoon, paypal said no there isn't enough money in Traffic Monsoon's a/c to cover their ad packs so complain to SEC. SEC get a court to appoint the receivers and all of the thousands of people who had business with Traffic Monsoon, including Traffic Monsoon had their money frozen.
SEC did not investigate the allegations made by paypal before appointing Receivers. My money was frozen with Traffic Monsoons money and all of the customers of Traffic Monsoon. I could not conduct my business due to this action by SEC and the receivers. I have been living off my savings and am now broke, My husband and I have used all of my savings, i.e. $100,000 to live on while all of this business has been going on caused by paypal and SEC. We had retired early, we sold our business and put a good amount into the business with Traffic Monsoon, that was suppose to be our income to live on and the $100,000 was our savings to stay in the bank. Because SEC did not investigate before involving the receivers many people who had put money into a business with Traffic Monsoon who do not even live in the USA are now suffering hardship. Traffic Monsoon did not even conduct their business in the USA and only 10% of the people involved with Traffic Monsoon live in the USA. so why do they have control of what happens with our money.
I want SEC to give me back the $100,000 that I have lost to date, and that is not counting the money I have in Traffic Monsoon, and along with all of the other people who have lost their money including Charles Schofield.
You and others talk about the Budget for different agencies in the USA that is extensive budgets for SEC and the others, ie. the Billions of Dollars in their budgets, SEC need a big budget to pay their lawyers for all of the companies that they take to court which are sometimes in the wrong but they proceed without investigating, they should also have to reimburse all of the people, all of the customers who sometimes have their life savings involved in business in companies like Traffic Monsoon. People just like me who end up broke because of agencies like SEC who can do whatever they like, No consequences, no pay back to the people that they hurt, they are alright, the same as you, you all go to work and decide on peoples lives, you all go home and go to bed without any conscience for all of the lives you have ruined. Please have a look at SEC's policies and actions and see the far reaching consequences of their proceedings, their actions, their misconduct. The USA Government have a duty to make sure that what SEC are doing is in the best interests of the people by being diligent in their investigations.
Regards Julie Dixon,