The SEC has been an active cop on the beat, as reflected in its recently released Enforcement Division statistics for the 2023 fiscal year, ended September 30, 2023. Both the total number of SEC enforcement actions and the number of “standalone” enforcement actions rose in FY 2023 compared to the prior year. The agency also filed the most enforcement actions against public companies since FY 2019. In addition, the SEC obtained the second highest annual amount of financial remedies in SEC history. Continue Reading SEC Stats Show the Agency is an Active Enforcement Cop
Even though the worst of the pandemic crisis in the U.S. appears, at least for now, to be past, the threat of COVID-19-related claims continues. In the latest example of the continuing COVID-19-related claim threat, the SEC has initiated a COVID-19-related enforcement action against a California-based digital health care company that had made claims early in the coronavirus outbreak about the company’s ability to profit from the outbreak. The SEC’s new action is a reminder that the threat of new COVID-19-related claims is ongoing. A copy of the SEC’s July 7, 2021 complaint against Parallax Health Sciences, Inc. can be found here. The SEC’s July 7, 2021 press release about the enforcement action can be found here.
Continue Reading SEC Files COVID-19-Related Enforcement Action Against Digital Health Firm
The number of SEC and PCAOB accounting and auditing enforcement actions decreased in 2020 relative to 2019, but monetary settlements increased year-over year, according to a recent report from Cornerstone Research. The report, entitled “Accounting and Auditing Enforcement Activity – 2020 Review and Analysis” (here), analyzes the agencies’ publicly disclosed accounting and auditing enforcement actions between 2015 and 2020. Cornerstone Research’s April 27, 2021 press release about the report can be found here.
Continue Reading Accounting and Auditing Enforcement Actions Down in 2020 While Total Settlements Increased
In the following guest post, Francis Kean provides us with ten reasons to be cheerful notwithstanding the current D&O insurance market. Francis is a Partner, Financial Lines, at McGill and Partners. A version of this article previously was published Insurance Day. I would like to thank Francis for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Francis’s article.
Continue Reading Guest Post: The State of the D&O Market: 10 Reasons to Be Cheerful
The SEC’s Office of the Whistleblower received a record 6,911 whistleblower tips during FY 2020, which ended September 30, 2020. The nearly 7,000 reports represent a nearly 33% increase over the number of tips received during the prior fiscal year, according to the Office’s recently released annual report. The Office also made awards representing a record high annual dollar value and to a record annual number of individual award recipients during the fiscal year. A copy of the November 16, 2020 report can be found here.
Continue Reading SEC: Record Number of Whistleblower Tips and Awards During FY 2020
As I noted at the time, earlier this month the SEC released its enforcement activity report for the fiscal year ending September 30, 2020. While the report fully detailed the agency’s enforcement activity, the report did not break out statistics reflecting the SEC’s actions against publicly traded companies. A November 18, 2020 report from Cornerstone Research, written in collaboration with the NYU Pollack Center for Law & Business, entitled “SEC Enforcement Activity: Public Companies and Subsidiaries Fiscal Year 2020 Update” (here), takes a detailed look at SEC enforcement activity involving publicly traded companies and their subsidiaries during FY 2020.
As was the case with enforcement activity overall, enforcement activity involving publicly traded companies declined during FY 2020 due to the impact of the coronavirus outbreak, but after a sharp drop in activity during the first half of the fiscal year, enforcement activity rebounded toward the end of the second half. The agency’s $1.6 billion in public company monetary settlements slightly exceeded the equivalent figures for FY 2019. Cornerstone Research’s November 18, 2020 press release about the report can be found here.
Continue Reading SEC Public Company Enforcement Actions Decreased in FY 2020, But Recoveries Increased
According to a new report from Cornerstone Research, the number of accounting and auditing enforcement actions the SEC initiated in 2019 was down slightly from the number initiated in 2018, but the number remained near the 2014-2018 average. Monetary settlements of accounting and auditing enforcement actions during 2019 totaled approximately $626 million. The June 25, 2020 report, which also summarizes accounting and auditing enforcement activity initiated by the PCAOB, is entitled “Accounting and Auditing Enforcement Activity – 2019 Review and Analysis” and can be found here. Cornerstone Research’s June 25, 2020 press release about the report can be found here.
Continue Reading SEC Accounting and Auditing Enforcement Actions Down Slightly in 2019
The SEC’s Enforcement Division had another active enforcement year in fiscal 2019, which ended September 30, 2019, that resulted in substantial recoveries. According to the Division’s latest annual report, the agency pursued more enforcement actions in fiscal 2019, including more standalone actions, than in the past several years. The agency’s enforcement action monetary recoveries, including both penalties and disgorgement, also were at the highest level in years. As the report points out, the agency maintained this level of activity and recoveries despite a number of factors – what the report describes as “significant headwinds” — that constrained the agency’s efforts and recoveries. The Enforcement Division’s November 6, 2019 annual report can be found here. The agency’s November 6, 2019 press release about the report can be found here.
Continue Reading The SEC’s Enforcement Division Reports Elevated Enforcement Action and Monetary Recovery Levels
Driven in significant part by the new actions filed as part of the SEC’s Share Class Selection Disclosure Initiative, the number of SEC enforcement actions against public companies and subsidiaries remained at “near-record levels” in the first half of fiscal year 2018, according to a recent report. The report, published by Cornerstone Research in collaboration with the NYU Pollack Center for Law & Business and entitled “SEC Enforcement Activity: Public Companies and Subsidiaries Midyear FY 2019 Update,” states that the enforcement activity levels in the first half of FY 2019 continued “a resurgence of activity that began in the second half of FY 2018.” The report can be found here. A May 15, 2019 press release describing the report can be found here.
Continue Reading SEC Public Company Enforcement Activity Remained Near Record Levels in FY2019’s First Half
On March 26, 2019, the SEC announced that it was awarding two whistleblowers a total of $50 million for providing the agency with information that led to a successful enforcement action. The two awards consisted of an award to one individual of $13 million and an award to a second individual of $37million. The $37 million award is the third largest award in the history of the SEC’s whistleblower program. The SEC’s March 26, 2019 press release announcing the awards can be found here. The SEC’s whistleblower award order can be found here.
Continue Reading SEC Awards Two Whistleblowers $50 Million, Including Third Largest Ever Individual Award