FYI: Enforcement’s 2018 Annual Report (for FY ending September 30, 2018) reflects the Division’s current guiding principles:
Principle 1: Focus on the Main Street Investor (rolling out, for example, the Share Class Selection Disclosure Initiative, under which the report indicates “scores” of IAs participated, which “will result in charges against them”).
Principle 2: Focus on Individual Accountability (for example, continuing to bring cases against CEOs and CFOs, as well as accountants, auditors and other gatekeepers).
Principle 3: Keep Pace with Technological Change (for example, enforcing against fraudulent ICOs and blockchain offerings, as well as continuing to use proprietary data analytics for identifying cases such as cherry-picking).
Principle 4: Impose Remedies That Most Effectively Further Enforcement Goals (imposing, for example, bars and suspensions as well as financial remedies).
Principle 5: Constantly Assess the Allocation of Division Resources (this includes moving into market segments that pose emerging risks and using initiatives like the SCSDI to have the most meaningful impact for investors and markets).
In total, the SEC brought 821 enforcement actions in FY18, more than the 754 brought in FY17 but less than the 868 brought in FY16. Division total headcount was down in FY18, to 1,344 staff and 122 contractors, from 1,393 staff and 121 contractors in FY17.
Of the cases brought in FY18, 490 were “stand-alone,” as opposed to “follow-on” cases in which bars were sought based on the outcome of prior SEC actions or actions by criminal authorities or other regulators. Of the 490 stand-alone cases, a significant number concerned securities offerings (25%), investment adviser/investment company issues (22%) and broker-dealer misconduct (13%), all up from FY17.
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