From the Regulators

Enforcement division releases report on priorities and enforcement activity

By James Langton |

The U.S. Securities and Exchange Commission's (SEC) enforcement division will focus in the coming year on misconduct that targets retail investors, the regulator says.

The division has issued a new report detailing its enforcement activity in fiscal 2017, and highlighting its priorities for the year ahead. In particular, the SEC intends to focus on defending retail investors by combating the sorts of misconduct that traditionally impacts retail investors, such as suitability issues, accounting fraud, pump and dump frauds, and Ponzi schemes, the report says.

The commission also intends to increasingly focus on individual accountability in its enforcement activity. Holding individuals accountable for wrongdoing serves as a more effective deterrent, the report says, and it enables the commission to protect investors by banning bad actors and recidivists, in particular.

"To be sure, this focus on individuals consumes more of our limited resources; with more to lose, individuals are more likely to litigate with the commission. But that price is worth paying," the report says.

Additionally, the SEC will also step up its efforts to combat misconduct that utilizes technology, such as market manipulation schemes that involve account hacking, or insider trading schemes that rely on cryptocurrency, the report indicates.

The SEC brought 754 actions and obtained judgments and orders totalling more than US$3.7 billion in disgorgement and penalties in fiscal 2017, according to the report. The commission also returned a record US$1.07 billion to harmed investors, suspended trading in the securities of 309 companies, and barred or suspended more than 625 individuals.