The U.S. Securities and Exchange Commission reported that it brought the second-highest number of enforcement actions in agency history in fiscal 2008.

The SEC said that it brought 671 enforcement actions during the just-completed fiscal year, with the number of insider trading and market manipulation cases up more than 25% and 45%, respectively, over the previous year. In addition, the SEC has more than 50 ongoing investigations relating to the subprime market.

For the second year in a row, the SEC also returned more than US$1 billion to harmed investors through Fair Fund distributions.

The Division of Enforcement also reached preliminary settlements in principle with six of the largest firms in the auction rate securities market. Although not included in the 2008 enforcement statistics, these settlements, which are subject to final approval by the commission, would be the largest in the history of the SEC and would return more than US$50 billion to investors.

The SEC took a record number of enforcement actions against market manipulation in 2008, including charges against a Wall Street short seller for spreading false rumors, and charging 10 insiders or promoters of publicly traded companies who made stock sales in exchange for illegal kickbacks.

The SEC also brought the highest number ever of insider trading cases in 2008. It adds that combating accounting fraud, including illegal stock option backdating, also was a priority for fiscal year 2008. During the year, the SEC charged eight public companies and 27 executives with providing false information to investors based on improper accounting for backdated stock option grants.

Another growth area is cases against U.S. public companies that use corporate funds to bribe foreign officials. In 2008, the SEC filed 15 such cases. Since January 2006, the SEC has brought 38 enforcement actions in this area — more than were brought in all prior years combined since FCPA became law in 1977.

“The SEC’s role in policing the markets and protecting investors has never been more critical,” said Linda Chatman Thomsen, director of the SEC’s Division of Enforcement. “The dedicated enforcement staff has been working around the clock to investigate and punish wrongdoing. The staff’s commitment is unwavering year-in and year-out. We look forward to continuing our vital mission of investor protection in the coming year.”

IE