Fines and other recoveries in SEC enforcement action hit record levels during the agency’s fiscal year ended September 30, 2020, even as pandemic-related work closures dampened the number of enforcement actions the agency was able to file, according to the SEC Enforcement Division’s annual report released Monday. The SEC scored a record total of $4.6 billion in recoveries, largely as a result of big fines and disgorgements in a few large matters, while the 405 new standalone enforcement actions the agency filed was the lowest number in six years. The Enforcement Division’s annual report can be found here. The agency’s November 2, 2020 press release about the report can be found here.
Continue Reading Despite COVID-19 Disruptions, SEC Recoveries at Record Levels in FY 2020
SEC Files Two More COVID 19-Related Enforcement Actions
As I have been monitoring coronavirus-related D&O claims activity in recent weeks, one area I have been watching in particular is the filing of SEC enforcement actions based on pandemic-related allegations. As I noted at the time it was filed, there has already been one coronavirus-related SEC action filed. Now, on May 14, 2020, the SEC has filed two more coronavirus-related enforcement actions, and its press release accompanying the filings the agency stated that it is “actively monitoring the markets to detect potential fraudsters” who are trying to exploit the current health emergency in order to reap gains by misleading investors. The SEC’s May 14, 2020 press release about its filing of the two actions can be found here.
Continue Reading SEC Files Two More COVID 19-Related Enforcement Actions
Guest Post: Supreme Court to Review Whether Statute of Limitations Applies to SEC Disgorgement Claims
Last Friday, the U.S. Supreme Court granted cert in two cases involving the limitations periods under the federal securities laws. One case, as I noted in a post earlier this week, will address the question of whether or not the filing of a securities class action tolls the Securities Act’s statue of repose. The second case, Kokesh v. Securities and Exchange Commission (about which refer here), involves the question of whether or not the five-year statute of limitations applicable to SEC enforcement actions seeking civil penalties applies to disgorgement claims. In the following guest post, attorneys from the Paul Weiss law firm take a look at the case and the issues it presents, as well as its potential implications. I would like to thank the Paul Weiss attorneys for their willingness to publish their 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 the Paul Weiss attorneys’ guest post.
Continue Reading Guest Post: Supreme Court to Review Whether Statute of Limitations Applies to SEC Disgorgement Claims
SEC Enforcement Activity Involving Public Companies
While the confirmation earlier this week that Mary Jo White will step down as SEC Chair at the end of the Obama administration raises interesting questions about the SEC’s possible future direction and priorities, the agency’s public company-related enforcement activities during the last fiscal year provide some very interesting insights about the SEC’s recent priorities. In an interesting November 15, 2016 report entitled “SEC Enforcement Activity Against Public Companies and Their Subsidiaries: Fiscal Year 2016” (here), the NYU Pollack Center for Law & Business and Cornerstone Research take a detailed look the SEC’s enforcement activity during the fiscal year ending on September 30, 2016. The report examines the agency’s record levels of enforcement activity involving public company defendants during the fiscal year.
Continue Reading SEC Enforcement Activity Involving Public Companies
Report: SEC Filed a Record Number of Enforcement Actions in FY 2015, Aggregate Fines and Penalties Declined
The SEC filed a record number of enforcement actions during FY 2015, but the aggregate value of fines, penalties, and disgorgements the agency collected during the fiscal year was well below the prior year’s total and long term averages, according to a detailed January 12, 2016 report produced in cooperation between the NYU Pollack Center for Law Business and Cornerstone Research. The report, which can be found here, is entitled “SEC Enforcement Activity Against Public Company Defendants: Fiscal Years 2010-2015,” is based on date collected in the Securities Enforcement Empirical Database (SEED), which is an online resource the two organizations sponsor and that provides data on SEC actions filed against public companies traded on the U.S. exchanges. The January 12, 2016 press release that accompanied the report can be found here.
Continue Reading Report: SEC Filed a Record Number of Enforcement Actions in FY 2015, Aggregate Fines and Penalties Declined
SEC Files Record Number of Independent Enforcement Actions in Fiscal 2015
According to the agency’s recently released enforcement activity statics, the SEC’s overall enforcement activity and the number of independent enforcement actions both increased in the fiscal year 2015 (which just ended on September 30) compared to prior years. More specifically, during fiscal 2015, the agency filed a record number of independent actions for violations of the federal securities laws. The agency’s enforcement statistics reflect a significant increase in the number of financial reporting and audit cases. The agency’s October 22, 2015 press release presenting its 2015 fiscal year enforcement statistics can be found here.
Continue Reading SEC Files Record Number of Independent Enforcement Actions in Fiscal 2015
Politics and SEC Enforcement
A number of factors might be supposed to affect the SEC’s exercise of its judgment in deciding which firms to investigate. Some possibilities that immediately come to mind are the nature and seriousness of the suspected problem; the way the problem came to the agency’s attention; and the availability of resources to investigate the problem.
A Whole Bunch of Interesting Litigation and Enforcement Statistics and Analyses
A single case may involve a host of interesting issues but sometimes the important lessons can only be discerned when many cases are considered collectively. This past week saw the release of some interesting analyses of aggregate litigation and enforcement statistics, each set of which told some interesting tales to tell and identified some important
More About the D&O Insurance Implications of the SEC’s New Admissions Wrongdoing Requirements
Numerous questions surround the SEC’s new policy requiring enforcement action defendants in “egregious” cases to admit to wrongdoing in order to settle with the agency, rather than simply agreeing to neither admit nor deny the agency’s allegations. As I discussed in a prior post (here), among the questions is the issue of what
A Closer Look at JP Morgan’s $920 Million “London Whale” Regulatory Settlements
As part of its September 19, 2013 entry into a total of $920 million in regulatory settlements related to the “London Whale” trading loss debacle, and as part of the SEC’s new policy requiring admissions of wrongdoing in certain “egregious” cases, JP Morgan provided the SEC with an extensive set of factual admissions. The company’s