In the immortal words of Christopher Wallace, “What you gonna do when Big Poppa comes for you?” American companies may want to ponder this pontification, and remain vigilant in their compliance efforts, as the Securities and Exchange Commission (SEC) filed a record number of cases in the fiscal year that ended Sept. 30.
The SEC brought 735 cases in 2011, up from 677 cases in 2010. However, despite this increased number, the commission collected just $2.8 billion in penalties, which is slightly down from last year’s $2.85 billion.
Many of the cases brought in 2011 involved complex products, transactions and market practices, and were related to the financial crisis and insider trading.
“We continue to build an unmatched record of holding wrongdoers accountable and returning money to harmed investors,” SEC Chairman Mary Schapiro said in a statement. “I am proud of our Enforcement Division’s many talented professionals and their efforts that resulted in a broad array of significant enforcement actions, including those related to the financial crisis and its aftermath.”
Since 2009, the SEC underwent an aggressive shift to reorganize and enhance its enforcement capabilities. In doing so, it revamped the way it handles tips and complaints; facilitated the swift prosecution of wrongdoers through a formal program that encourages cooperation from individuals and companies in investigations; and created national, specialized units in five priority areas involving complex and higher-risk areas of potential securities laws violations.
The results of these actions can be seen in the dramatic rise in cases brought and penalties recovered.
“This remarkable accomplishment has its roots in the talent, grit and determination of the staff, as well as their creativity and willingness to consider new tools and approaches to stopping and deterring fraud and misconduct,” Robert Khuzami, director of the SEC’s Division of Enforcement, said in the statement.
For greater detail on the SEC’s 735 cases in 2011, read more on the SEC’s website.
