SEC Shows New Toughness with More Enforcement Actions and Penalties
In a recent speech, SEC Chairman Mary Schapiro emphasized the enhanced focus on enforcement actions. She noted the hiring of a “tough prosecutor,” Bob Khuzami, to lead the Enforcement Division, encouraged “toughness” for the Division’s attorneys, and revealed a significant increase in enforcement activity during the first 9 months of the year as compared to the same period last year: more than twice as many enforcement orders (448 vs. 181), twice as many emergency orders, significantly more investigations, and twice the amount of disgorgements and penalties ($1.8 Billion vs. $865 Million last year).
OUR TAKE: Whether or not the laws change, the SEC’s enhanced enforcement efforts will significantly affect market participants. Per the SEC’s statistics, the likelihood of an examination, an enforcement action, and financial penalties have all increased dramatically.