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Day: October 13, 2016

SEC Filed Record Number of Enforcement Cases in Fiscal 2016


The SEC reported that it filed a record number of enforcement actions for its fiscal year ending September 2016, including the most ever cases against investment advisers and investment companies.  The SEC brought 868 enforcement cases, exceeding the 807 it filed last year, including 160 against advisers and investment companies, which cases included 8 significant cases against private equity firms.  The SEC also cited its related cases against securities markets gatekeepers (e.g. attorneys, accountants, administrators), while noting the success of the whistleblower program, which awarded over $57 Million to 13 whistleblowers.  The SEC obtained over $4 Billion in disgorgement and penalties. SEC Chair Mary Jo White boasted, “By every measure the enforcement program continues to be a resounding success holding executives, companies and market participants accountable for their illegal actions.”  She also explained that the SEC is “expanding the playbook bringing novel and significant actions to better protect investors and our markets.”

OUR TAKE: The SEC has become a litigation and enforcement machine rather than a traditional regulator.  Focusing on the number of actions filed and penalties collected, the SEC will continue to use “novel” interpretations of the securities laws to ensure that it files ever more cases.