Enforcement action by the U.S. Securities and Exchange Commission (SEC) in fiscal 2013 generated a record US$3.4 billion in monetary sanctions ordered against securities law violators.
The SEC says that it filed 686 enforcement actions in the fiscal year, which ended in September. The result, was US$3.4 billion in disgorgement and penalties, which is up by 10% from fiscal 2012, and 22% from fiscal 2011.
Additionally, it reports that its enforcement division opened 908 investigations last year (up 13%) and obtained 574 formal investigation orders (up 20%). The SEC’s Office of the Whistleblower received 3,238 tips during the year and paid more than US$14 million to whistleblowers whose information substantially advanced enforcement actions.
“A strong enforcement program helps produce financial markets that operate with integrity and transparency, and reassures investors that they can invest with confidence,” said Mary Jo White, chair of the SEC.
The SEC notes that it brought several significant actions against stock exchanges and others on issues relating to market structure during the year; and obtained its largest-ever penalty against an exchange (US$10 million against Nasdaq) over the issues with Facebook’s IPO. It also levied its first penalty against an exchange for violations relating to regulatory oversight.
Looking ahead, it has created a new task force to improve its ability to detect and prevent financial statement and other accounting frauds; and a task force to address fraud in the microcap markets. It also says it has significantly improved its analytical capabilities; and has created a new centre to coordinate and enhance risk identification and assessment.