SEC filed record number of enforcement actions in fiscal year 2014

BY KEN TYSIAC

With the help of new investigative approaches—and data and analytical tools—the SEC filed a record 755 enforcement actions totaling $4.16 billion in disgorgement and penalties in fiscal year 2014, the securities regulator announced Thursday.

The totals for the 2014 fiscal year, which ended in September, are preliminary figures. The SEC filed 686 enforcement actions totaling $3.4 billion in fiscal year 2013, and 734 enforcement actions totaling $3.1 billion in fiscal year 2012.

More than 135 parties were charged with violations relating to reporting and disclosure in fiscal year 2014. First-ever actions filed by the SEC in fiscal year 2014 included actions involving the market access rule and the “pay-to-play” rule for investment advisers; an emergency action to halt a municipal bond fund offering; and an action for whistleblower retaliation.

Enhanced uses of data and quantitative analysis aided the SEC in its enforcement actions, SEC Chair Mary Jo White said in a news release. The SEC in 2013 began using data analysis through its Accounting Quality Model tool to identify anomalies in companies’ financial reporting that merit closer inspection.

“Aggressive enforcement against wrongdoers who harm investors and threaten our financial markets remains a top priority, and we brought and will continue to bring creative and important enforcement actions across a broad range of the securities markets,” White said.

SEC Enforcement Director Andrew Ceresney said the division will continue to use its resources across the entire spectrum of the financial industry, including complex accounting fraud and market structure cases, investment adviser and municipal securities cases, microcap fraud, insider trading, and cases against gatekeepers.

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA editorial director.

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