Legal Risk Management Tips

As part of its “Fiscal Year 2016 Agency Financial Report” released by the U.S. Securities and Exchange Commission (“SEC”) last month, the SEC discussed enforcement cases for its fiscal year of 2016 (which concluded on September 30th).  According to the Report, the SEC once again set a new record for the number of enforcement actions filed in a fiscal year, having filed a record 868 enforcement actions in 2016, representing an increase of about seven percent (7%) from the number of actions brought in 2015.  Of the 868 enforcement actions, a record 160 were cases involving investment advisers or investment companies.[1]

As part of its “Fiscal Year 2014 Financial Report” released by the Securities and Exchange Commission (“SEC”) last month, the SEC discussed how “new investigative approaches and the innovative use of data and analytical tools” helped contribute to a strong year of enforcement actions.  According to the report, the SEC ended the fiscal year of 2014 (which for the SEC concludes on September 30^th) having filed for a record 755 enforcement actions across a broad range of misconduct.  Furthermore, the SEC stated the resulting disgorgement and monetary penalties arising from these enforcement actions totaled $4.16 billion according to preliminary figures.  Compare this total to the $3.1 billion total in 2012 (based upon 734 enforcement actions), and $3.4 billion total in 2013 (based upon 686 enforcement actions), and it’s clear to see that the SEC is not only increasing the number of enforcement actions, but such actions are more costly than ever before.  According to SEC Chair Mary Jo White, “innovative use of technology, enhanced use of data and quantitative analysis was instrumental in detecting misconduct and contributed to the Enforcement Division’s success.”