The Securities and Exchange Commission recently announced a 7% increase in its enforcement actions for fiscal year 2015 over the previous year. The SEC filed 807 enforcement cases in 2015, up from 755 the prior year, and brought claims for disgorgement and civil penalties totaling approximately $4.2 billion, up from $4.16 billion in 2014. Of the total cases filed, 507 were filed in federal district court, and the remaining 300 were instituted as administrative actions.
Beyond the increase in enforcement filings, the SEC touted several of its “first-of-a-kind” cases for 2015, including those filed against:
• A credit rating agency for fraudulent misconduct in its ratings of certain commercial mortgage-
backed securities (CMBS).
• A private equity advisor for misallocating broken deal expenses.
• An underwriter for pricing-related fraud in the primary market for municipal securities.
• An auditing firm for issuing false and misleading unqualified audit opinions concerning the
financial statements of its clients.
In addition, the SEC cited a few examples of its high-priority cases, including:
• Charges against 87 parties in insider trading cases, several of which the SEC claims
were “complex” and were discovered through its “innovative uses of data and analytics to spot
suspicious trading.”
• Trading suspensions in the securities of 334 issuers to fight market manipulations (pump and
dumps) and microcap fraud.
• Charges against approximately 36 individuals for participation in a fraudulent scheme to profit
from stolen nonpublic, material corporate earnings information.
• Sanctioning of three securities broker-dealers for violations of the market access rule, which
requires firms to have adequate risk controls in the place before providing customers with
market access.
Finally, the SEC announced that its whistleblower program in fiscal year 2015 issued awards to 8 whistleblowers totaling approximately $38 million.
David R. Chase, the principal of the Law Firm of David R. Chase, PA, is a former SEC Prosecutor, and for over the past 15 years since leaving the SEC has worked as a SEC defense attorney representing individuals, and licensed securities professionals, nationwide in SEC investigations, SEC enforcement actions and SEC administrative proceedings.
