SEC Trumpets New Enforcement Records
The SEC announced a record $3.4 Billion in monetary sanctions resulting from 686 enforcement actions for the fiscal year that ended September 30, 2013. The monetary sanctions represent a 22% increase over 2011 and a 10% increase over 2012. Andrew Ceresney, co-director of the Enforcement Division, said that the SEC is looking to bring “high-quality enforcement actions that make an impact across the market.” The SEC also lauded its “Strong Pipeline” for next year: “The Enforcement Division headed into the next fiscal year well positioned for significant achievements across its program, having opened 908 investigations last year (up 13 percent) and obtained 574 formal orders of investigation (up 20 percent).” The SEC highlighted holding gatekeepers – accountants, attorneys, directors – as one of its most significant initiatives.
OUR TAKE: As the SEC congratulates itself on its record enforcement statistics, it may be worth re-considering John Walsh’s “open letter” to Chairman Mary Jo White, in which he questions whether a goal to set new enforcement records ultimately undermines the SEC’s credibility. (See blog.cipperman.com/search.aspx?q=enforcement%20record&sc=tcon&dt=a&al=). Additionally, we cringe at the SEC describing the enforcement docket as a “strong pipeline.” It’s a bit like an undertaker celebrating the plague.