Introduction The Securities and Exchange Commission has put American banks under tight scrutiny since 2012 when JPMorgan’s was involved in the provision of false information concerning the trade losses it incurred during the first quarter of the year. From then on, institutions like Bank of America have strived to put their house in order to prevent such gambles in the future. Prevention of high-risk gambles in securities/banking The Security Exchange Commission in the USA is responsible for supervising the activities of professionals who render financial services to their consumers or clients and mutual fund trading to avert fraud and deliberate deceit. It contributes to openness to the activities of U.S. companies to allow potential and existing investors to obtain correct information regarding their validity. This regulation eventually prevents abrupt changes in the stock market due to unavailable or undisclosed information. This further safeguards investors when buying stock and mutual funds. The Security Exchange Commission under the Security Act of 1933 and the Security Exchange Act of 1934 has put in place policies and rules that guide the sector. According to the acts, all investors have the right to get information about an investment before making a decision to venture into it. All public companies are required under the laws to provide their correct financial information for scrutiny by the investors. This reveals useful information about the market and prevents fraud that might occur due to some undeclared information. The commission also regulates the environment under which trading occurs by making sure that all the parties involved are aware of the obligations and rules that they are required to follow. The commission enforces the above laws against those who flout them by using civil or administrative actions. When the commission finds out the misconduct of a party, it may decide to file a complaint and ask the court for approval. The commission could also forward the case to an administrative law judge. Elements of a valid contract between banks and customers The elements of a valid contract between banks and their customers vary according to the context of the contract. This contains details of the first and basic agreements between the parties involved. There is also the element of duty of good faith and fair dealing, which means that it is the responsibility of each party to be committed fully to the contract. There could also be a contravention of the contract whereby one party fails to perform its part of the bargain as earlier agreed. This may lead to interference with the other party as it may have adverse effects on its expectations and performance. There could also be damages on one party’s properties due to the conduct of the other party. This could result in one party demanding payment of the damages caused. Banks and their customers should endeavor to have honesty while conducting their businesses and transactions. The expectations of both parties should play a big role as this makes the basis of their preliminary agreement. There could always be frictions, which may end up in a court of law in cases where the bank or the customer feels that the opposite