SEC generates fewer enforcement actions, brings in record $3.4B in sanctions

The SEC also touted a high number of whistleblower tips as well as revealed its 2014 pipeline

As the Securities and Exchange Commission (SEC) moves away from a caseload dominated by wrongdoings that led to the financial crisis, the agency appears to be doing more with less.

For the fiscal year ending in September, the SEC levied enforcement actions totaling $3.4 billion in monetary sanctions ordered against wrongdoers. This tally comes as the starting of so-called early stage probes by the SEC reached its lowest levels in at least a decade, according to the latest figures released by the SEC.

In the last fiscal year, the SEC filed 686 enforcement actions. The $3.4 billion in disgorgement and penalties resulting from those actions is 10 percent higher than FY 2012 and 22 percent higher than FY 2011, when the SEC filed the most actions in agency history.

“A strong enforcement program helps produce financial markets that operate with integrity and transparency, and reassures investors that they can invest with confidence,” Mary Jo White, chair of the SEC, said in a statement.  “I am incredibly proud of the dedicated and talented women and men of the Enforcement Division. Our results show that we are prepared to tackle the breadth and complexity of today’s securities markets.”

White, who took the helm as chair of the SEC in April, has taken an aggressive position toward the financial community in order to ensure compliance and stave off another economic collapse.

The SEC also touted other notable figures: The Office of the Whistleblower received 3,238 tips in the past year and paid more than $14 million to whistleblowers whose information substantially advanced enforcement actions. The SEC also noted its pipeline for 2014 having opened 908 investigations last year (up 13 percent) and obtained 574 formal orders of investigation (up 20 percent).

“We are focused on addressing wrongdoing in all corners of the financial industry,” added George S. Canellos, co-director of the SEC’s Division of Enforcement. “Going forward, we will continue to be aggressive but fair in our pursuit of those who violate the securities laws.”

A decade in the making, hedge fund SAC Capital Advisors LP will be forced to close its doors following a $1.2 billion insider-trading settlement with the U.S. government. The agreement follows the hedge fund giant’s earlier, $616 million civil pact with the SEC. The $1.8 billion penalty, a record for an insider-trading case, will go to the U.S. Treasury.

The SEC’s latest report also revealed that FCPA enforcement actions have dropped in the past year while monetary sanctions continue to rise. The number of enforcement actions fell by two-thirds. There were only five such actions in 2013, as compared to 15 actions in 2012 and 20 in 2011.


For more SEC related stories, check out InsideCounsel’s coverage below:

FCPA enforcement plummets in 2013

SEC whistleblower tips benefit Justice Department

Crowdfunding gets a new look from the SEC

Fifth Third Bank to pay $6.5M to settle SEC charges

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Erin E. Harrison

Erin E. Harrison is the Editor in Chief of InsideCounsel magazine. Harrison’s professional background includes extensive expertise in both print and online media, highlighted by...

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