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Difficulty: MediumSecurities and Exchange Commission (SEC) Role and Jurisdiction

The Securities and Exchange Commission (SEC) holds the statutory authority under federal securities laws to summarily suspend trading in any non-exempt security for a period of up to 10 business days if it determines that such action is required in the public interest and for the protection of investors.

Answer: Answer

Answer

The statement is True. The SEC possesses explicit statutory authority under Section 12(k) of the Securities Exchange Act of 1934 to summarily suspend trading in any non-exempt security for up to 10 business days to protect investors and preserve fair and orderly markets.
The statement is correct because Section 12(k) of the Securities Exchange Act of 1934 provides the SEC with direct civil authority to order emergency summary trading suspensions lasting up to 10 business days in any non-exempt security when public interest demands it.

Step-by-Step Solution

1
Identify the regulatory entity and the specific power described in the stem.
The statement focuses on the SEC's authority to impose emergency trading suspensions on non-exempt securities.
Determining validity requires evaluating the statutory authority granted to federal regulators versus SROs under the Securities Exchange Act of 1934.
2
Analyze federal statutory provisions governing SEC enforcement and market oversight powers.
Section 12(k) of the Securities Exchange Act of 1934 explicitly empowers the SEC to issue summary trading suspensions of up to 10 business days when necessary for investor protection.
This administrative power allows the SEC to immediately protect market participants when a security lacks current, accurate public disclosure or is subject to potential fraud.
3
Formulate the final evaluation of the statement.
The statement accurately reflects federal securities regulation and SEC jurisdiction.
The statement is True.

Key Concept

SEC Emergency Trading Suspension Authority under Section 12(k) of the Exchange Act of 1934
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Securities and Exchange Commission (SEC) Role and Jurisdiction

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