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.
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Despite Record SEC Enforcement Activity, Senator Warren Calls for President to Fire Agency Chair
Perhaps SEC officials hoped they were bolstering their agency’s image as a tough regulator when they reported on October 11, 2016 that the SEC had filed a record number of enforcement actions in fiscal year 2016. That was certainly the way the officials quoted in the agency’s press release played it. But if that was their plan, Senator Elizabeth Warren, at least, was having none of it. Just days after the agency released its enforcement statistics, Senator Warren sent a 12-page letter to President Barack Obama calling for the President to fire Mary Jo White as SEC Chair, because, the Senator contends, under White’s watch the agency has undermined the administration’s priorities, ignored the SEC’s core mission of investor protection, and failed to promulgate or implement disclosure requirements Warren supports.
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The SEC Wants You to Know that It Intends to Protect Whistleblowers’ Rights
The SEC has long made it clear that it intends to protect whistleblowers and to suppress activities it believes will have the effect of discouraging whistleblower activity. The agency recently launched enforcement actions against companies that had incorporated various waivers in employee severance agreements that discouraged employees from reporting possible securities law violations to the SEC. The agency’s actions shows that the agency is prepared to actively target corporate actions the agency believe may suppress the whistleblowing process.
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The Yates Memo and the Potential Liabilities of Corporate Directors
Last September, amidst considerable fanfare, the U.S. Department of Justice released a new directive – now universally known as the Yates Memo – in which it restated and reinforced the agency’s commitment to targeting corporate executives in cases of corporate wrongdoing. The cornerstone of the agency’s new policies is the specification that in order for a company to qualify for any cooperation credit in connection with a DoJ investigation, the company must provide the agency with all relevant facts about the individuals involved in the misconduct. This same focus on individuals has been echoed by top SEC officials, including the SEC’s current chair. With several months’ of experience now under the new directive, it seems worth asking how the SEC renewed focus on individuals has translated into practice and what the implications are for corporate directors.
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SEC Whistleblowing Program: The Agency Means Business
The SEC wants you to know that it means business about its whistleblowing program. On April 1, 2015, in the latest in a series of steps to protect and encourage whistleblowers, the agency entered an order in an enforcement action against KBR saying that the company’s confidentiality requirements for internal investigation witnesses violated the agency’s
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.
Guest Post: “Robocop” on the Beat:What the SEC’s New Financial Reporting and AQM Initiative May Mean for Public Companies
With the arrival of the new Chair of the SEC, Mary Jo White, the agency has undertaken a variety of new enforcement initiatives. Among the most interesting is the agency use of data anallytics to try to uncover public company accouunting abuses. The following guest post from Christopher L. Garcia, Paul Ferrillo of the
SEC Releases Fiscal 2013 Whistleblower Report
Whistleblower reports to the SEC continued to rise during the latest fiscal year, according to the agency’s annual Dodd-Frank Whistleblower Program report to Congress. According to the November 15, 2013 report, a copy of which can be found here, there were 3,238 whistleblower reports to the SEC during the 2013 fiscal year, brining the