SEC’s Enforcement Division Issues Annual Report
On November 6, the SEC’s enforcement division issued a report summarizing its enforcement actions and areas of focus during fiscal year 2019, which ended on September 30.
In the report, enforcement division co-directors Stephanie Avakian and Steven Peikin express pride in the division’s accomplishments during fiscal year 2019: “By removing bad actors from the markets, obtaining effective, tailored remedies and acting quickly to stop frauds and prevent losses, the Commission’s enforcement actions sent clear and important messages to market participants, and enhanced confidence in the integrity and fairness of our markets. And in many cases, the Commission’s enforcement actions resulted in the return of funds to harmed investors.” Two particular areas of focus identified in the report are: (i) misconduct between investment professionals and retail investors, and (ii) cyber-related misconduct.
The enforcement division saw increases in key quantitative metrics during fiscal year 2019 despite an almost total cessation of activity for 35 days during the longest federal government shutdown in history from December 22, 2018, to January 25, 2019. The SEC brought a total of 862 enforcement actions (compared to 821 and 754 in fiscal years 2018 and 2017, respectively) and returned nearly $1.2 billion to harmed investors (compared to approximately $0.8 billion and $1.1 billion in fiscal years 2018 and 2017, respectively). As in fiscal year 2018, the largest percentage of enforcement actions related to asset management (36 percent), securities offerings (21 percent) and issuer reporting and accounting issues (17 percent).