SEC Set Records for Enforcement Actions, Penalties and
Disgorgements in 2015

Last week, SEC Chair Mary Jo White testified before the U.S.
Senate Committee on Banking, Housing, and Urban Affairs. 
Several of Ms. White’s comments may be of interest to
potential SEC whistleblowers.

1.Testimony: SEC Sets Records in 2015

According to Ms. White, “The SEC filed a record 807
enforcement actions in FY 2015 covering a wide range of
misconduct, and obtained orders totaling $4.19 billion in
disgorgement and penalties, both at record levels.”  (Testimony, p. 5.)

Ms. White further testified that “Each of the last three years
has been marked by vigorous enforcement and examination
programs, empowered with new tools and methods to detect and
hold wrongdoers accountable and protect investors.” 
(Testimony, p. 1.)

As I reported
previously, during that same testimony, Ms. White also praised the SEC
Whistleblower Award Program as having had “a transformative
impact on our enforcement program.”

2. Testimony:  Key Areas for SEC Enforcement

One question that potential SEC whistleblowers often wonder is
whether the SEC will be interested in the wrongdoing they have
uncovered.

During her testimony, Ms. White identified several “key areas”
that the SEC continues to focus on.  One area that Ms. White
called “critical” is “financial reporting and issuer
disclosure.”  According to Ms. White:

Comprehensive, accurate, and reliable financial reporting is
the bedrock upon which our markets are based, and is essential
to ensuring public confidence in them.  And at my direction,
since 2013, our Enforcement Division has intensified its focus
on pursuing violations in this area.  Part of this effort
involved creating a dedicated group of accountants, attorneys,
and analysts who use cutting edge data analytical tools to
look for evidence of reporting discrepancies and other early
warning signs of financial reporting fraud.  (Testimony, p.
6.)

Another “key area of enforcement” that Ms. White addressed is
investment management:

… the SEC has continued to bring actions addressing a widening
range of issues, including performance advertising,
undisclosed conflicts of interest, compliance issues, and
private equity fees and expenses.  Among these are
“first-of-their-kind” actions for failures to report material
compliance matters to fund boards and the improper allocation
of expenses by private equity advisers.  The Enforcement
Division’s focus on private equity has expanded significantly
over the past few years … (Testimony, p. 6.)

Other areas that Ms. White identified during her testimony
included:

• high frequency trading
• the operation of trading platforms such as dark pools
• manipulative trading
• misusing confidential customer trading information
• market access
• technology controls, and
• net capital violations

(Testimony, p. 6.)

3. What Else does the SEC Investigate?

In an
earlier post, I wrote about anti-money laundering charges that the SEC
recently brought against a Wall Street brokerage firm for
“failing to sufficiently evaluate or monitor customers’
trading for suspicious activity” by failing to file Suspicious
Activity Reports (SARs).  Some other things that the SEC can
and does investigate include:

• Accounting frauds
• Books and Records violations
• Financial Statement frauds
• Initial Public Offering frauds (IPOs)
• FCPA violations (bribery or improper payments made to
  foreign officials)
• Deceptive practices in buying or selling stocks
• Municipal Securities frauds
• and more

* * *

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The Pickholz Law Offices LLC is a law firm that focuses on
representing clients involved with investigations conducted by
the U.S. Securities and Exchange Commission, FINRA, and other
securities regulators.

The Pickholz Law Offices has represented employees, officers,
and others in SEC whistleblower cases involving financial
institutions and public companies listed in the Fortune Top
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clients in securities enforcement investigations conducted by
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Attorney’s Offices, State authorities, and more. Examples of
some of the many
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How to Contact the Pickholz Law Offices LLC

If you would like to speak with a securities lawyer or SEC
whistleblower attorney, please feel free to call Jason R.
Pickholz at 347-746-1222.

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