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expensive and time-consuming, works to the respective markets' advantage by giving investors a level of confidence in trading in such markets.

The second category in market regulation is the independent federal agency, the Securities and Exchange Commission (SEC). Established in 1933, the SEC has the responsibility for administering the federal securities laws designed to protect investors in securities markets. The SEC's primary task is to make sure that the securities markets operate fairly and investors have access to disclosure of all material information concerning publicly traded securities. The SEC also regulates firms engaged in the purchase or sale of securities, people who provide investment advice, and investment companies. The SEC has been given a great deal of freedom and a broad authority to pursue and prosecute those who commit securities fraud in order to effectively eliminate any negative elements from the securities markets.

If you are wondering what types of fraud may exist in the markets, they are too numerous to count, and many are well disguised as legitimate activities. As we said, the financial markets offer an irresistible way for the criminals to illegally profit, and often profit big. Some of these fraudulent activities are:

• Unethical brokers who are in the position to take advantage of their unsuspecting customers using methods such as unjustifiably or excessively recommending the buying and selling of securities in order to collect more commissions (a practice known as churning), hyping a security that they also own in order to raise its value, or skimming their customers' accounts. …