First to demonstrate just how easy it can be to make a mistake on a private level by not being well educated on the laws of the SEC lets look at the Martha Stuart case. Martha Stuart may or may not have been informed on the exact laws of The SEC however that is irrelevant because ignorance of a law is no excuse for breaking the law. Martha Stuart took advice from a friend on a stock trade and that advice ending up being classified as insider trading with a very harsh punishment of 1-2 years in prison5. It is impossible to say whether or not Martha Stuart truly new she was breaking the law, or if she simply thought the SEC was not as omniscient as it actually is. To exemplify the importance on a larger more public scale it is useful to look at a massive multi-national company that reached number 5 on the Forbes Fortune 500 list: Enron. Enron was a corporation that had made many illegal financial decisions such as insider trading, lying on accounting forms, and committing securities fraud. These decisions caused Enron to go bankrupt and caused several of their executives to wind up in jail6. These cases are very well known and illustrate how in the financial sector no matter how big or small a company or private investor is it must be mindful of …show more content…
After hours of research on the laws and regulatory entities, I have found that I still do not know all of the regulatory entities. I also realized that to be a financial advisor means that you must have knowledge of financial laws similar to how a lawyer would have knowledge of all the other government laws. I did not realize just how serious The SEC and other entities were and how severe the punishments could be for something that seems so innocent. Before I make any large investments or start any career in finance I think it is important that I know the things that could send me to jail or fined astronomical amounts of money. It is also important that I learn more about all the governing bodies and laws surrounding the financial world so I can use that knowledge to benefit me over less educated investors. Most importantly I have realized that to stay out of trouble and better answer my remaining questions about the law I need two things: a lot of free time for reading, and a really good