SEC ENFORCEMENT ACTIONS RISE FOR THE THIRD STRAIGHT YEAR

Last month, the SEC released its enforcement results for fiscal year 2016, which ended September 30, 2016. In FY 2016, the SEC filed a record 868 enforcement actions, a 7.5% increase from FY 2015. It was also the third straight year that the number of enforcement actions filed by the SEC increased from the prior year. The 868 enforcement actions included a record number of enforcement actions involving investment advisors and investment companies (160 enforcement actions) and a record number of Foreign Corrupt Practices Act-related enforcement actions (21 enforcement actions).

The SEC reported that it obtained over $4 billion in disgorgement and penalties, which is consistent with the amount obtained in disgorgement and penalties for the two previous fiscal years.  The SEC also reported that it distributed a record $57 million to whistleblowers in FY 2016.

The SEC used the opportunity to note its success in “first-of-their-kind” actions, which included actions against a firm solely based on its failure to file Suspicious Activity Reports, against an audit firm for auditor independence failures based on personal relationships, and against a private equity advisor for acting as an unregistered broker. The Director of the SEC’s Enforcement Division also noted groundbreaking insider trading and FCPA cases, and the SEC’s press release detailed four favorable jury verdicts in U.S. District Court in FY 2016. The full press release is available here: https://www.sec.gov/news/pressrelease/2016-212.html.