U.S. Securities and Exchange Commission (SEC) enforcement activity remained elevated through the first half of fiscal year 2017, according to Cornerstone Research. The data show an increase in actions involving broker-dealers, issuer reporting and disclosure, and securities offerings.
The SEC filed 231 actions for new matters during the first half of FY 2017 (October 1, 2016–March 31, 2017), slightly higher than the 225 actions filed during the same period in FY 2016.
According to SEC Enforcement Activity—First Half FY 2017 Update, overall enforcement actions were down. The SEC filed 334 enforcement actions during the first half of FY 2017, down from 372 filings during the same period in FY 2016. However, most of the decline can be attributed to a decrease in actions against delinquent filers. Excluding those actions, there were 299 actions in the first half of FY 2017—virtually unchanged from the same period last fiscal year.
“In the face of uncertainty brought on by changes in SEC leadership and the new administration, enforcement activity continued last year’s heightened pace,” said Dr. David Marcus, senior vice president at Cornerstone Research. “In addition, despite critique and court challenges to the administrative proceeding forum, the Commission continued to file the vast majority of its actions—80 percent—as administrative proceedings rather than civil actions.”
Cornerstone Research categorizes enforcement actions by allegation type. According to this research, the number of cases involving broker-dealers, issuer reporting and disclosure, and securities offerings increased during the first half of FY 2017:
- Actions against broker-dealers increased 20 percent.
- Actions related to issuer reporting and disclosure jumped 34 percent.
- Actions involving securities offerings rose 34 percent.
These increases were accompanied by a 50 percent decline in actions against delinquent filers—only 35 were filed during the first half of FY 2017, compared to 70 in the first half of the previous fiscal year. Actions involving allegations of insider trading and Foreign Corrupt Practices Act (FCPA) violations also decreased.
Source: Cornerstone Research
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