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Has the SEC fallen asleep on its watch?

(Click for video linked to a searchable transcript of this Mad Money segment!)

If you suddenly hear snoring on Wall Street, Jim Cramer thinks there's a good chance you've run into the SEC.

The "Mad Money" host believes the very people who are supposed to keep investors safe have effectively fallen asleep on their watch.

Cramer pines for the SEC under Arthur Levitt, who chaired the commission from 1993-2001. During Levitt's tenure Cramer said the objective of the SEC was "to give the little guy a break, to level the playing field, to make the market safe for the individuals."

That Cramer believes led to great prosperity for everyone.

However, in more recent years, Cramer believes the various SEC chiefs seemed to shun individuals in favor of major brokerages and Wall Street heavy hitters.

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In recent years, "The SEC has supported all kinds of financial innovations, such as high frequency trading, that have made the market more volatile," said Cramer. And he added they've repealed measures such as the uptick rule that used to protect the market from manipulation.

That Cramer finds outrageous.

Andersen Ross | Brand X Pictures | Getty Images

Not only does it harm individual investors but Cramer thinks long-term the market is harming itself by eroding confidence in its legitimacy.

However, Cramer doesn't expect the situation to change anytime soon. Therefore he says investors need to be prepared for market anomalies to occur again. They could be relatively small or they could be akin to the Flash Crash of 2010.

Remember, "As you go swimming in this market, the lifeguard is most definitely off-duty," Cramer said. "A big wave may come and smack you in the face."

* Although we all love curling and the Olympics on CNBC television, if you're still looking for money making insights from Jim Cramer, you'll find plenty right here on Mad Money's website. We've scoured the archives and selected favorite articles and videos that are both timeless and relevant; information you can use right now. Look for something every day.

Call Cramer: 1-800-743-CNBC

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