In a stock market many con game player and some stock brokers are present who are performing against the regulations. As all we know that there is a complex regulatory structure is in place that guards that investor find a fair deal
If this system is working properly is debatable. It is working properly some one says but what to do with the news which tells us the stories of the market specialist firms firm who pay fines more than $240 million for trading their investors over ours. And you must had read about the mutual firm executives trading after the market closes for their own accounts. Or if there are some stock broker is juggling with the account of his client. This entire make one think that regulatory structure is not functions properly.
As for as the regulation laws are concerned they are in place and US congress is the top of the heap it passes major laws to regulate the industry and it also authorized budget to the SEC.The SEC is the agency which oversea the securities industry. The registration of new securities keep eye on public companies to publish their annual or quarterly reports regularly
The SEC also oversea all stock exchanges and any other agency connected with the selling of securities. FINRA is another regulatory authority which was created in 2007. This is the self regulatory authority of the industry which strictly monitors the securities industry.
FINRA licenses stockbrokers and other industry professional that fulfill the standards of set by it.
FINRA watch the market and identify the person s that are involved in unethical business and cancel their licenses.
FINRA also deal with customer complains which they register that some one is doing sort of illegal and unethical activity it also watch the activity of member from and detect any illegal trading pattern that may evolve.
In addition to that individual exchanges their own regulatory functions within their own area of operation. The duty is to provide fair deal to the customers.
Individual states do have their own sureties regulatory bodies which may are not sophisticated as FINRA, but their functions are same as FINRA within the boundaries of that state
Finally brokers are asked to keep creation record and perform checks and audits of their operation to make sure that all going well and nobody are doing anything illegal.
We discussed in length about regulatory authorities and learned about their functions and their procedure that how they operate and how they can revoke the licenses of any firm which is doing some thing illegal or unethical. Here at this point a question arises that all of these regulations will protect you from any tape. Unfortunately the answer is that no, you are not fully protected. You will be fully protected only when you develop batter understanding of the business, perform some research and select were carefully the persons with whom you may think doing business is safe.
If you combine you self care with these regulations then I think it is difficult for any one to tape you.