SEC investigation

An SEC investigation is when the Securities and Exchange Commission (the government agency that oversees stock markets) formally looks into whether a company or person broke financial rules. You'll see this mentioned in company filings or news when there's suspected wrongdoing like accounting fraud, insider trading, or misleading investors. It matters because investigations can result in fines, forced leadership changes, or even criminal charges—all of which affect your investment. For example, if TechCorp disclosed it was under SEC investigation for overstating revenue, that's a red flag that something went wrong with how they reported their finances. Think of it as the financial world's version of a police investigation.