SEC Sets Record In Enforcement Actions Against Advisers

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SEC Sets Record In Enforcement Actions Against Advisers

The SEC filed a record number of enforcement actions against investment advisers and firms during the past fiscal year, the commission announced. It filed 160 cases against advisers and firms, including 98 standalone cases, rather than follow-up actions or cases based in delinquent regulatory filings. The SEC stated that both numbers are records.

The agency additionally filed a record number of total enforcement actions across its entire area of oversight, 868, including 548 standalone cases. It collected over $4 billion in disgorgement and penalties.

SEC Chairwoman Mary Jo White referred to the commission’s enforcement program “a resounding success” and said it has been strengthened by improvements in the use of data.

“Over the last three years, we have changed the way we do business on the enforcement front by using new data analytics to uncover fraud, enhancing our ability to litigate cases and expanding the playbook, bringing novel and significant actions to better protect investors and our markets,” White stated.

The SEC has been under pressure to strengthen its oversight of investment advisers. The agency currently examines annually about 10% of the approximately 11,500 registered advisers. It is shifting examination resources to target advisers, which could end up boosting enforcement statistics.

Among the high profile enforcement actions that the SEC completed in fiscal 2016 were a $415 million action against Merrill Lynch for misusing client funds and a case involving 13 advisory firms that repeated false claims by F-Squared Investments.

The higher number of SEC enforcement actions against advisers also can be attributed to its scrutiny of private equity and hedge funds, which the Dodd-Frank financial reform law required to register with the agency.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

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