FISCAL YEAR 2012 SUMMARY OF PERFORMANCE 

AND FINANCIAL INFORMATION

U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission at a Glance

What We Do: The U.S. Securities and 

Exchange Commission (SEC) oversees 

key participants in the securities markets, 

including broker-dealers, investment 

companies, investment advisers, clearing 

agencies, transfer agents, credit rating 

agencies, and securities exchanges. The 

SEC is concerned primarily with promoting 

the disclosure of important market-related 

information, maintaining fair dealing, and 

protecting against fraud. Crucial to the 

SEC’s effectiveness in each of these areas 

is its enforcement authority. Each year the 

SEC brings hundreds of civil enforcement 

actions against individuals and companies 

for violation of the securities laws.

Established: During the peak year of 

the Depression, Congress passed the 

Securities Act of 1933. This law, along 

with the Securities Exchange Act of 

1934 (Exchange Act), which created the 

SEC, was designed to restore investor 

confidence in our capital markets by 

providing investors and the markets with 

more reliable information and clear rules of 

honest dealing.

Branch of Government: Executive

FY 2012 Leadership:

Chairman Mary L. Schapiro

Number of Full-Time Equivalents 

(FTEs): The SEC employed 3,785 FTEs 

in fiscal year 2012. 

Website: www.sec.gov

Vision

The SEC strives to promote a market environment that is worthy of the 

public’s trust and characterized by transparency and integrity.

Mission

The mission of the SEC is to protect investors; maintain fair, orderly, 

and efficient markets; and facilitate capital formation.

Values

Integrity Accountability Effectiveness

Teamwork Fairness Commitment to Excellence

About the SEC 

•	 The SEC has five presidentially appointed Commissioners, with staggered 

terms. One of them is designated by the President as Chairman of the 

Commission.

•	 The Commission convenes regularly scheduled meetings that are open to 

the public and the news media unless the discussion pertains to confidential 

subjects, such as whether to authorize enforcement actions.

•	 The SEC is responsible for overseeing the nation’s securities markets 

and certain primary participants, including broker-dealers, investment 

companies, investment advisers, clearing agencies, transfer agents, credit 

rating agencies, and securities exchanges, as well as organizations such 

as the Financial Industry Regulatory Authority (FINRA), Municipal Securities 

Rulemaking Board (MSRB), and Public Company Accounting Oversight 

Board (PCAOB). Under the Dodd-Frank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act), the agency’s jurisdiction was expanded to 

include certain participants in the derivatives markets, private fund advisers, 

and municipal advisers, among other changes.

•	 To help support investor education, the SEC offers the public a wealth of 

educational information on www.investor.gov and an online database of 

disclosure documents at www.sec.gov/edgar/searchedgar/companysearch.

html that public companies and other market participants are required to 

file with the SEC.

FY 2012 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION

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FY 2012 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION

Fiscal Year 2012 Performance Highlights

Enforcement and Compliance 

The SEC continued to bring cases 

in record numbers, leading the effort 

against those who contributed to the 

financial crises.

•	 The 734 enforcement actions brought 

in FY 2012 marked the second highest 

amount ever filed in a fiscal year. Of 

these, 150 were filed in investigations 

designated as National Priority Cases.

•	 The Commission distributed to 

harmed investors $508 million 

obtained through the SEC’s enforcement actions. These payments were 

made through 72 Fair Funds set up 

under a provision of the SarbanesOxley Act.

•	 The National Examination Program 

created several specialized working 

groups to better focus on entities 

most likely to present risk to 

investors, leading to a significant rise 

in the percentage of examinations 

that resulted in findings deemed 

“significant” or which were referred to 

the Division of Enforcement for further 

action.

•	 The first whistleblower payout was 

made to an individual who provided 

high quality, significant information 

that helped stop a multi-million dollar 

fraud.

Investor Focused Rulemaking

The SEC continued to pursue a robust, 

investor-focused rulemaking agenda 

propelled in part by the demands of 

the Dodd-Frank Act and in recognition 

that investor protection regulations need 

to reflect the reality of today’s modern 

technology.

FY 2012 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION

•	 The Commission approved or 

disapproved 308 Self Regulatory 

Organization (SRO) rule changes filed 

pursuant to the Exchange Act, which 

represents a 40 percent increase over 

the prior fiscal year. The Commission 

determinations occurred within the 

Dodd-Frank Act statutory timeframes 

99 percent of the time.

•	 The Commission surpassed all of its 

FY 2012 targets for responding timely 

to written requests for no-action 

letters, exemptive applications, and 

written interpretive requests. 

•	 The Commission surpassed all of its 

FY 2012 targets for correcting market 

outages at SROs and Electronic 

Communications Networks.

Investor Access to Information

The SEC continued to carry out the 

SEC’s investor education program, 

which includes producing and 

distributing educational materials, 

participating in educational seminars 

and investor-oriented events, and 

partnering with Federal agencies, state 

regulators, and others on investor 

literacy initiatives.

•	 The Commission reached a total of 

16 million investors, 1.2 million more 

investors this year than in FY 2011, 

as a result of a direct mail partnership 

with the Internal Revenue Service, 

and held 47 in-person events.

•	 During FY 2012, the Commission 

issued initial comments on Securities 

Act filings within an average of about 

25 days of filing. Timely reviews allow 

companies seeking to raise capital to 

build offering schedules around the de 

facto standard of 30 days.

•	 In FY 2012, the SEC.gov website 

which provides the public with 

information about the SEC’s mission, 

actions, and rule interpretations as well 

as educational information and free 

access to the EDGAR database of 

corporate filings had more than a billion 

hits per month, a fivefold increase of 

web traffic from the prior year.

Strategic Goals and Costs

GOAL 1: Foster and enforce compliance 

with the Federal securities laws

Cost: $552.3 million

GOAL 2: Establish an effective 

regulatory environment

Cost: $163.9 million

GOAL 3: Facilitate access to the 

information investors need to make 

informed investment decisions

Cost: $187.2 million

GOAL 4: Enhance the Commission’s 

performance through effective alignment 

and management of human, information, 

and financial capital

Cost: $294.1 million

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A Year of Continuing Progress

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n 2013, the SEC will continue to embrace its 

increasing regulatory and oversight responsibilities 

while further improving performance in the functions 

that have traditionally defined the agency. These 

include aggressive enforcement actions, thorough 

examinations, proactive disclosure efforts, and robust 

rules focused on investor protection.

Much of this will be accomplished through better use of 

the Commission’s most powerful tool, the nearly 4,000 

talented and motivated men and women who work at 

the SEC. Among other advancements, staff will have 

better access to needed technology, as improvements 

continue to come on-line – improvements that include 

data mining, workflow, and risk analysis tools that 

allow the staff to keep up with an increasingly complex 

financial system. Investors will continue to benefit, as 

well, from a commitment to improving staff skills and 

to deploying personnel in ways that leverage in-house 

expertise and experience in key areas.

SEC staff will work towards completion of DoddFrank Act rulemaking, filling regulatory gaps that were 

highlighted by the financial crisis and that posed risks for 

both individual and institutional investors. Staff will also 

focus on further implementation of the Jumpstart our 

Business Startups (JOBS) Act, designed by Congress to 

give entrepreneurs and small businesses greater access 

to early-stage capital.

2013 Fiscal Year 2012 Financial Highlights

SELECTED FINANCIAL DATA FOR FY 2012 AND FY 2011

(DOLLARS IN MILLIONS) FY 2012 FY 2011

Total Assets $ 8,761 $ 8,517

Total Liabilities $ 1,162 $ 1,106

Net Position $ 7,599 $ 7,411

Annual Net Position Change 3% 8%

Total Program Costs $ 1,198 $ 1,148

Revenues $ 1,648 $ 1,644

Net (Income) Cost from Operations $ (450) $ (496)

Total Budgetary Resources $ 1,236 $ 1,713

Actual FTEs at Fiscal Year End 3,785 3,844

SUMMARY OF INDEPENDENT AUDITOR’S INTERNAL CONTROL FINDINGS

Category FY 2012 Audit Finding

Material Weaknesses None

Significant Deficiencies Budgetary Resources

Property and Equipment Controls

Below is a discussion of a few of the notable highlights for the 

agency’s finances in FY 2012.

Reserve Fund

Section 991(e) of the Dodd-Frank Act authorized the creation 

of a Securities and Exchange Commission Reserve Fund 

(Reserve Fund). Funded from filing fee collections, the SEC 

can deposit up to $50 million per fiscal year, and the fund 

cannot hold more than $100 million in total. Excess filing fees 

are deposited to the U.S. Treasury General Fund. 

In FY 2012 and subsequent fiscal years, filing fee collections 

are no longer offsetting collections. Filing fees deposited to 

the Reserve Fund can be used to fund the SEC’s operations, 

create budgetary authority, and are reported as a component 

of Appropriations (Discretionary and Mandatory) on the SEC’s 

Statement of Budgetary Resources. Filing fees deposited to 

the U.S. Treasury General Fund cannot be used to fund the 

SEC’s operations, do not create budgetary authority, and are 

reported as Transferred to the General Fund on the SEC’s 

Statement of Changes in Net Position.

For the fiscal year ended September 30, 2012, filing fee 

revenues were $378 million. $50 million was deposited into 

the Reserve Fund, of which $25 million was temporarily 

rescinded. The excess of $328 million was deposited into the 

U.S. Treasury General Fund. In prior fiscal years, all filing fee 

collections created budget authority from offsetting collections 

and were used to partially fund SEC’s operations.

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Downward Adjustments of Prior Year 

Unfunded Lease Obligations

The SEC recognized an unfunded obligation totaling 

$137.7 million for the Constitution Center lease in FY 2011. In 

June 2012, the SEC and U.S. General Services Administration 

(GSA) signed an agreement transferring responsibility for 

the Constitution Center lease to GSA. Based upon this 

agreement, the SEC recognized a downward adjustment 

totaling $137.7 million. 

Fiscal Year 2012 Program Costs 

The SEC organizes its divisions and offices under the 10 major 

programs. Total FY 2012 costs of $1,198 million consist of 

the sum of (1) the costs of resources directly or indirectly 

consumed by the programs, and (2) the costs of identifiable 

supporting services provided by other responsibility segments 

within the agency. The SEC allocates support costs to its 

programs using activity-based cost accounting. 

Investor Protection Fund

The SEC prepares standalone financial statements for the 

Investor Protection Fund as required by the Dodd-Frank Act. 

The Investor Protection Fund was established in the fourth 

quarter of FY 2010 to provide funding for a Whistleblower 

Award Program and to finance the operations of the Office of 

Inspector General’s Employee Suggestion Program. 

INVESTOR PROTECTION FUND ACTIVITY

FOR THE YEARS ENDED SEPTEMBER 30, 2012 AND 2011

(DOLLARS IN THOUSANDS) FY 2012 FY 2011

Balance of Fund at beginning of preceding 

fiscal year $452,788 $451,910

Amount deposited into or credited to the 

Fund during the preceding fiscal year — —

Amount of earnings on investments during 

the preceding fiscal year 757 990

Amount paid from the Fund during the 

preceding fiscal year to whistleblowers (46) —

Amount paid from the Fund during the 

preceding fiscal year for expenses 

incurred by Employee Suggestion 

Program (70) (112)

Balance of the Fund at the end of the 

preceding fiscal year $ 453,429 $ 452,788

Fiscal Year 2012 Financial Highlights continued

FY 2012 SUMMARY OF PERFORMANCE AND FINANCIAL INFORMATION

4
U.S. SECURITIES AND EXCHANGE COMMISSION

100 F Street, NE, Washington, DC 20549

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