Since the financial crisis hit, it seems like it’s been all fraud cases all the time. But although the past two years, the Securities and Exchange Commission (SEC) has been setting records for number of enforcement actions filed, the agency is likely to file significantly fewer civil fraud cases this year, the Wall Street Journal reports.
At a conference last month in Washington D.C., acting SEC enforcement head George Canellos noted that the agency is “in a different era.” Even so, the previous “record results in enforcement” were highlighted as one of the major successes of the SEC under Mary Schapiro, who stepped down as chairman of the agency last year.
President Barack Obama picked Mary Jo White to be her successor, an appointment which a Senate panel is set to approve on Tuesday. But this new era might prove less than ideal for White, who could face criticism from the press and Congress, which might perceive fewer fines as the agency being more lenient on business. In January and February 2013, the SEC filed 24 civil and administrative actions, compared with 30 in January and February 2012.
One area where in-house counsel can expect to see increased enforcement is accounting fraud. Alleged financial reporting misconduct claims were the largest category of tips the SEC received last year.
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