Which entity is responsible for protecting investors against fraud and regulating U.S. securities markets?

The Securities and Exchange Commission (SEC) is primarily responsible for protecting investors against fraudulent activities and regulating the U.S. securities markets. Established in the aftermath of the 1929 stock market crash, the SEC enforces federal securities laws, ensures that investors receive accurate information about securities being offered for sale, and oversees the securities industry, including stock exchanges and brokers.

The SEC's role includes monitoring corporate takeovers, regulating mutual funds, enforcing anti-fraud provisions, and requiring public companies to disclose their financial condition and results of operations to the public. Through these functions, it aims to maintain fair, orderly, and efficient markets, which ultimately fosters investor confidence in the U.S. financial system.

Other entities mentioned have specific roles but do not encompass the comprehensive regulatory authority of the SEC over securities markets. For instance, the Federal Trade Commission focuses on consumer protection and preventing anti-competitive business practices, the Consumer Financial Protection Bureau is dedicated to overseeing financial products and services for consumers, and FINRA self-regulates brokerage firms and exchange markets but operates under the broader oversight of the SEC. Thus, the SEC stands out as the key authority in protecting investors directly related to securities.