{"id":5220,"date":"2012-04-27T00:03:28","date_gmt":"2012-04-27T04:03:28","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=5220"},"modified":"2018-09-21T02:04:24","modified_gmt":"2018-09-21T06:04:24","slug":"fact-file-annual-budget-of-the-u-s-securities-and-exchange-commission","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2012\/04\/27\/fact-file-annual-budget-of-the-u-s-securities-and-exchange-commission\/","title":{"rendered":"Fact File: Annual Budget of the U.S. Securities and Exchange Commission"},"content":{"rendered":"<p><span style=\"font-size: 16px;\">The U.S. Securities and Exchange Commission, which is charged with ensuring the proper functioning of <a title=\"Wikipedia's List of World's Stock Exchanges\" href=\"http:\/\/en.wikipedia.org\/wiki\/List_of_stock_exchanges\">U.S. financial markets worth at minimum $18,929 billion<\/a> in market capitalization (the NYSE, NASDAQ, and AMEX combined), <a title=\"Reuters article about size of the fiscal 2013 SEC budget with budget increase amount\" href=\"http:\/\/www.reuters.com\/article\/2012\/02\/13\/usa-obama-cftc-idUSL2E8DD9Z420120213\">has a paltry annual budget of just $1.321 billion<\/a>.<\/span><\/p>\n<p><span style=\"font-size: 16px;\">Why paltry?<\/span><\/p>\n<p><span style=\"font-size: 16px;\">To put this in perspective:<\/span><\/p>\n<ul style=\"margin-left: 5%;\">\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">The SEC budget is 99.99% smaller than the markets it is supposed to protect.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">The SEC budget is equal to $1 for every $14,329 that it is charged with protecting.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">The SEC\u2019s recent additional budgetary request amounts to an additional $0.13 for every $1,000,000 it supervises.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 16px;\"><!--more-->To further contextualize the SEC&#8217;s funding, we&#8217;ve compared its budget to various other line-items in the U.S. federal budget.<\/span><\/p>\n<ol>\n<li style=\"padding-bottom: 3%; font-weight: bold;\"><span style=\"font-size: 16px;\">The SEC budget of $1.321 billion versus <a title=\"Budget line item data from the private site U.S. Government Debt\" href=\"http:\/\/www.usgovernmentdebt.us\/budget_gs.php\">U.S. budget line item<\/a> for:<\/span>\n<ul style=\"margin-left: 5%;\">\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">\u201cAgriculture, forestry, fishing and hunting: surveys, investigations, and research\u201d\u00a0\u2014 $1.1 billion, or 16.7% smaller than the SEC budget.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">\u201cRecreational and sporting services\u201d \u2014 $4.2 billion, or 217.9% larger than the SEC budget.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">\u201cFish and wildlife service\u201d \u2014 $1.6 billion, or 21.1% larger than the SEC budget.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">\u201cMarshalls service\u201d \u2014 $1.2 billion or 9.2% smaller than the SEC budget.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">\u201cGeneral property and records management&#8221; \u2014 $2.3 billion, or 74.1% larger than the SEC budget.<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"padding-bottom: 3%; font-weight: bold;\"><span style=\"font-size: 16px;\">The SEC budget of $1.321 billion is 0.03% of the entire <a title=\"Wikipedia's entry for the fiscal 2013 U.S. budget\" href=\"http:\/\/en.wikipedia.org\/wiki\/2013_United_States_federal_budget\">2013 U.S. budget of $3.803 trillion<\/a>.<\/span><\/li>\n<li style=\"padding-bottom: 3%; font-weight: bold;\"><span style=\"font-size: 16px;\">The SEC budget is $1 for every $2,878.88 spent on other programs.<\/span><\/li>\n<li style=\"padding-bottom: 3%; font-weight: bold;\"><span style=\"font-size: 16px;\">The SEC budget of $1.321 billion versus key 2011 financials for just one major bank, <a title=\"Ironically, the SEC's EDGAR 10-K for Citigroup's 2011 Financial Results\" href=\"http:\/\/www.sec.gov\/Archives\/edgar\/data\/831001\/000120677412000799\/citigroup_10k.htm\">Citigroup<\/a>:<\/span>\n<ul style=\"margin-left: 5%;\">\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">Bank profits of $11.1 billion, equivalent to 7.4 more SECs.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">Total assets of $1,873.9 billion, equivalent to 1,417.5 more SECs.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">Net working capital of $33.8 billion, equivalent to 24.6 more SECs.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">Citi&#8217;s vague net working capital line-item \u201cother, net\u201d is $9.3 billion, equivalent to 6.0 more SECs.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">The closest line-item to the SEC budget in Citi&#8217;s financial statements is \u201cproceeds from sales of premises and equipment, subsidiaries and affiliates, and repossessed assets,\u201d which was $1.323 billion. Put another way, Citigroup disposed of assets last year that were worth more than the SEC\u2019s entire budget.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">This is just one major bank in the United States and represents just 12.7% of the total assets of <a title=\"US Federal Reserve Board's data on the top 50 largest U.S. banks as of 31 March 2012\" href=\"http:\/\/www.ffiec.gov\/nicpubweb\/nicweb\/Top50Form.aspx\">the United States\u2019 largest 50 banks<\/a> at $14.8 trillion<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"padding-bottom: 3%; font-weight: bold;\"><span style=\"font-size: 16px;\">The SEC budget of $1.321 billion versus just three <a title=\"Motley Fool reporting data on the top highest paid hedge fund managers\" href=\"http:\/\/www.fool.com\/investing\/general\/2012\/04\/13\/the-highest-paid-hedge-fund-managers.aspx\">investment professionals<\/a> that the market regulator will ultimately be charged with overseeing under the Dodd-Frank financial reform legislation:<\/span>\n<ul style=\"margin-left: 5%;\">\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">Ray Dalio of Bridgewater Associates earned $3.9 billion in 2011, equivalent to 1.9 more SECs.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">Carl Icahn of Icahn Capital Management earned $2.5 billion, equivalent to 89% of another SEC.<\/span><\/li>\n<li style=\"padding-bottom: 3%;\"><span style=\"font-size: 16px;\">James Simons of Renaissance Technologies earned $2.0 billion, equivalent to 51.4% of another SEC.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<p><span style=\"font-size: 16px;\"><em>Originally published on CFA Institute\u2019s \u00a0<a href=\"https:\/\/blogs.cfainstitute.org\/investor\/\">Enterprising Investor<\/a>.<\/em><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. Securities and Exchange Commission, which is charged with ensuring the proper functioning of U.S. financial markets worth at minimum $18,929 billion in market capitalization (the NYSE, NASDAQ, and AMEX combined), has a paltry annual budget of just $1.321 billion. Why paltry? To put this in perspective: The SEC budget is 99.99% smaller than [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5221,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[91,130,131],"class_list":["post-5220","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-blog","tag-primer","tag-sec","tag-securities-and-exchange-commission"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/5220","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=5220"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/5220\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media\/5221"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=5220"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=5220"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=5220"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}