Oct 16, 2014
SEC Press Release - October 16, 2014: SEC’s FY 2014 Enforcement Actions Span Securities Industry and Include First-Ever Cases.
10/16/2014 02:10 PM EDT
The Securities and Exchange Commission today announced that in fiscal year 2014, new investigative approaches and the innovative use of data and analytical tools contributed to a very strong year for enforcement marked by cases that spanned the securities industry.
In the fiscal year that ended in September, the SEC filed a record 755 enforcement actions covering a wide range of misconduct, and obtained orders totaling $4.16 billion in disgorgement and penalties, according to preliminary figures. In FY 2013, the Commission filed 686 enforcement actions and obtained orders totaling $3.4 billion in disgorgement and penalties. In FY 2012, the Commission filed 734 enforcement actions and obtained orders totaling $3.1 billion in disgorgement and penalties.
The agency’s enforcement actions also included a number of first-ever cases, including actions involving the market access rule, the “pay-to-play” rule for investment advisers, an emergency action to halt a municipal bond offering, and an action for whistleblower retaliation.
“Aggressive enforcement against wrongdoers who harm investors and threaten our financial markets remains a top priority, and we brought and will continue to bring creative and important enforcement actions across a broad range of the securities markets,” said SEC Chair Mary Jo White. “The innovative use of technology – enhanced use of data and quantitative analysis – was instrumental in detecting misconduct and contributed to the Enforcement Division’s success in bringing quality actions that resulted in stiff monetary sanctions.”
“Time and again this past year, the Division’s staff applied its tremendous energy and talent, uncovered misconduct, and held accountable those who were responsible for wrongdoing,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement. “I am proud of our excellent record of success and look forward to another year filled with high-impact enforcement actions.”
In addition to the first-ever cases, Chair White noted that the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative was an important effort that began in the last fiscal year. The SEC reached a settlement with a California school district for charges of misleading bond investors, making it the first settlement under the initiative targeting municipal disclosure.
Director Ceresney added that, going forward, the Enforcement Division will continue to bring its resources to bear across the entire spectrum of the financial industry, from complex accounting fraud and market structure cases, to investment adviser and municipal securities cases, microcap fraud, insider trading, and cases against gatekeepers.
SEC Enforcement in Fiscal Year 2014
Combatting Financial Fraud and Enhancing Issuer Disclosure
- Charged more than 135 parties with violations relating to reporting and disclosure. Cases include actions against Bank of America Corporation; Fifth Third Bancorp and its former CFO; snack food maker Diamond Foods Inc. and its former CEO and CFO; five executives and finance professionals from collapsed law firm Dewey & LeBoeuf LLP; animal feed companyAgFeed Industries Inc. and eight executives; and CVS Caremark Corp. and its retail controller.
- Continued to devote resources to combat market manipulation and microcap fraud, including by filing multiple actions against penny stock promoters and others who created a false appearance of genuine interest in various stocks, and by using trading suspensions to neutralize threats to investors after questions arise concerning the adequacy or accuracy of an issuer’s disclosures. The SEC also suspended trading in hundreds of dormant shell companies that were ripe for abuse in the over-the-counter market.
- Filed several actions to halt international investment frauds, including those that spread through social media and targeted, among others, immigrant communities. These cases include actions against 11 operators and promoters in a scheme known as CKB and CKB168, plus related entities; against World Capital Market Inc., WCM777 Inc., and their founder; and against eight operators and promoters of TelexFree, Inc. and related entities. The Enforcement Division will continue to root out pyramid and Ponzi schemes that prey on vulnerable investors.
- Brought coordinated charges against 34 individuals and companies for violating laws requiring them to promptly report information about their holdings and transactions in company stock, under a new initiative using quantitative analytics to identify especially high rates of filing deficiencies.
Includes common, closed end funds, ETFs, ETNs and REITS
x - stock is trading ex-dividend
Source: WSJ Market Data Group