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SEC Chairman Jay Clayton says Americans need financial literacy now more than ever

Key Points
  • Economic inequality has been exacerbated by Covid-19 and SEC Chair Jay Clayton says that increases the need for financial literacy.
  • A recent surge in stock trading on platforms like Robinhood and SEC scrutiny of Hertz's plan to offer more stock after its bankruptcy filing show that investor interest is high despite the coronavirus recession.
  • Clayton says not enough Americans learn about creating a solid investment plan early in life.
SEC Chair: America needs more financial literacy now

Federal Reserve chief Jay Powell said on Tuesday in his congressional testimony that the recession in the wake of the coronavirus pandemic could widen income inequality for minorities and Americans in lower-income categories. Securities and Exchange Commission Chairman Jay Clayton says the SEC can play a role in addressing economic inequality.

In an interview on Wednesday, Clayton told me that one of the most important things the SEC does is to promote financial literacy and investor education. There are many opportunities in the stock market, as the surge back from the March low caused by the Covid-19 economic shutdown shows. But there are also risks, as the SEC's scrutiny of a planned stock offering from Hertz, which declared bankruptcy, highlights, and which Clayton discussed on CNBC on Wednesday morning.

Financial education and participation in the financial industry are distributed much more narrowly than they should be, the SEC chair said, and that is putting certain communities at a distinct disadvantage. The SEC is working on ways to expand financial education and access to financial opportunities, including through work with outside groups such as school districts, faith-based institutions, and professional organizations.

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The SEC's education website,, is a good place to start. It is designed specifically for retail investors to become more informed about the markets, investing, and how they can participate. Clayton, who appears in educational videos on the site, has often said the two things he has heard most consistently are that people wish they knew more about investing and that they had started earlier. 

I asked Clayton about the resurgence in retail trading, particularly in beaten-up sectors like airlines, and even some bankrupt companies. Hertz halted its plan to offer stock on Wednesday, pending an SEC review. Watch the full interview I conducted with Clayton above to see what the SEC Chair had to say about the markets right now.

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