Lexington, KY - Many Kentuckians hear the words "Securities Exchange Commission" on television or radio and immediately wonder who's being investigated this time. While it's true the SEC is America's chief enforcer of securities laws, many Kentuckians don't realize that the agency spends a significant amount of resources on investor education. Since the SEC is now making a new push to share this information with everyday investors, the message Kentuckians will hopefully heed is simple - the SEC can help you protect your investments now as well as enforce the laws later.
"The best defense against fraud is a well-informed investor," said Mark Story, director of new media for the SEC. "At the Securities and Exchange Commission, we can't tell investors which investments to make (or not make), but we certainly offer sound, unbiased advice on how to make wise choices and avoid fraud."
One of the reasons we're seeing the SEC in the news so often is people in the Bluegrass and beyond put their hard-earned money in investments they didn't understand, sometimes run by people who didn't deserve their trust. Investments are as complex as ever and it's tempting to place your confidence in someone who throws a lot of big words at you while showing you rates of return that consistently "outperform the market." The schemes these fraudsters promote all tend to rely on a single thing - an uninformed investor. The SEC's investor education program provides everything from research tools and calculators, to updates on the latest scams, to the fundamental pieces of advice that never seem to lose their value, such as "if it sounds too good to be true, it probably is."
The high-profile investment scams the media has (rightfully) reported on has led some to avoid the securities market altogether, exacerbating the current economic crisis. So it's arguably more important than ever to have a more informed retail investor, according to Story. "Our economic downturn can be partially attributed to a lack of consumer confidence," he said. "The best way to build up your confidence in investing in securities is to have as much information as you can - in short, to be a well- informed investor."
Of course, Story understands people tend to focus on the scandal of the moment, and not on the considerably less sexy news about education - but this is precisely why investor education is so important. "The SEC is 75 years old and crises, some serious and some fleeting, come and go," Story said. "Sure, there are only so many inches in a column, but we have not wavered from our core messages of investing wisely and avoiding fraud."
Today the SEC uses the online channel and social media tools to push their education resources directly to investors. "For example, the SEC was only the second government agency to use Twitter, a microblogging platform that enables us to send 140 character messages to our followers," Story explained. The agency has three Twitter accounts: one for investors (twitter.com/SEC_Investor_Ed), one for members of the media (twitter.com/SEC_News) and even one for job seekers (twitter.com/SEC_Jobs). The SEC also produces podcasts so people can listen to information when it's convenient for them and they've published videos on YouTube. They've even built a mobile website (m.sec.gov) for people to get information wherever they are.
This is just the beginning. The agency is developing an ambitious plan to make their resources even more accessible. "For the short term, we will be launching a 'micro site' strictly for investors in the coming weeks, one that contains much of the excellent investor education information that we produce, but that is presented in a way that makes it easier to find, understand and digest - and is targeted specifically for investors," Story said. "Second, in the near future, we will be developing the capacity to enable our stakeholders to choose an area of interest and receive email alerts when we issue information in which they have expressed an interest." Of course, the SEC is also watching developments in online and social media closely, making sure that their investor education information is available anywhere investors care to go.
Investor education isn't a new feature from the SEC, but in the past it's really only been available to those select few who knew where to look. Now, thanks to an aggressive outreach strategy and new communications technology tools, the agency can push education resources wherever needed, providing vital investor protections at a critical time. Call it what you will - new-fangled gimmicks, keeping with the times, or even "change you can believe in" - it's nice to see a government agency providing protections now and not just imposing enforcement later.