Wednesday, February 17, 2016

SEC Releases FY 2015 Enforcement Data

By Mark S. Nelson, J.D.

The SEC released FY 2015 data on enforcement activity showing that over the last five years, as compared to prior reports, civil actions declined in number while administrative and follow-on administrative actions rose, as did the total number of agency enforcement actions. The SEC’s FY 2013 report had changed the types of actions covered by these reports to exclude 21(a) Reports and some civil contempt matters. The FY 2015 report goes beyond prior data by providing separate totals for stand-alone and follow-on administrative actions.

For FY 2015, the SEC brought a total of 807 civil and administrative actions, including 162 civil actions and 645 administrative proceedings, which can be further broken down into 477 stand-alone administrative proceedings and 168 follow-on administrative proceedings. All told, these matters resulted in orders for disgorgement of $3.019 billion and penalties of $1.175 billion.

According to Table 2 in the FY 2015 report, the top five categories overall, with the number of defendants/respondents in in brackets, were:
  • Issuer reporting and disclosure—135 [213]. 
  • Delinquent filings—132 [455]. 
  • Investment advisors/investment companies—126 [231]. 
  • Broker-dealers—124 [172]. 
  • Securities offerings—98 [397]. 
The SEC’s report notes that each matter was placed in one category, even if the matter spanned multiple categories.

The top five categories for stand-alone administrative proceedings were: delinquent filings (132), issuer reporting and disclosure (92), municipal securities and public pensions (78), investment advisors/investment companies (57), and broker-dealers (36). For follow-on administrative proceedings: broker-dealers (84), investment advisors/investment companies (50), issuer reporting and disclosure (21), securities offerings (7), and market manipulation (3).

As for civil actions, the SEC’s activity spanned many of the same categories. Data in the FY 2015 report highlighted the following: securities offerings (59), market manipulation (28), insider trading (26), issuer reporting and disclosure (22), and investment advisors/investment companies (19).

Taking closer look at insider trading matters, 26 of the 39 total actions were civil actions. Twelve actions were stand-alone administrative proceedings, while just one was a follow-on administrative proceeding. Insider trading matters amounted to 4.8 percent of all FY 2015 SEC enforcement actions based on primary classification. FCPA activity came in just ahead of the miscellaneous category at 1.6 percent of all actions, while rating agencies, SROs/exchanges, and transfer agents saw the least activity.

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