SEC Collects Record $3.4 Billion in 2013 Enforcement Actions

The Securities and Exchange Commission (SEC) announced that it levied a record $3.4 billion in sanctions in its fiscal year 2013 ending September 30, 2013. This is an increase of 10% from the previous year, augmented by a settlement of more than $600 million with a unit of hedge fund SAC Capital and a $525 million settlement with BP Plc. Fiscal 2013's total sanctions were 22% higher than in the 2011 fiscal year, despite the fact that the 686 cases filed in 2013 was down from the more than 730 cases filed in 2011 and 2012.

SEC enforcement measures in FY 2013 include —

  • The largest penalty ever assessed against an exchange when NASDAQ agreed to pay $10 million for its poor systems and decision-making during the Facebook IPO;
  • Charges against the Chicago Board Options Exchange and an affiliate for systemic breakdowns, representing the SEC's first penalty against an exchange for violations relating to regulatory oversight;
  • Efforts to hold accountable those who have special duties to ensure that the interests of investors are safeguarded — accountants, attorneys and trustees.
  • Continued focus on insider trading, including multiple actions for alleged wrongdoing at SAC Capital and its affiliates, including a failure-to-supervise action against SAC adviser Steven Cohen;
  • Increased attention to securities violations by municipalities and other participants in the market for securities of cities and other governmental issuers;
  • Enforcement actions filed against 169 individuals — including 70 CEOs, CFOs or other senior executives — and entities arising from the financial crisis resulting in more than $3 billion in disgorgement, penalties and other monetary relief for the benefit of harmed investors;
  • The aggressive use of SEC litigation resources to maximize the deterrent impact of enforcement actions; and
  • The receipt of 3,238 tips by the SEC’s Office of the Whistleblower and more than $14 million paid to whistleblowers whose information substantially advanced enforcement actions.

The agency says it plans to continue aggressive enforcement measures in 2014 with the creation of new task forces, technological improvements within the agency and a solid pipeline of cases with a reported 908 investigations opened and 574 formal orders of investigation obtained last year.

Corporate compliance is essential in a regulatory atmosphere focused on uncovering and enforcing violations of SEC laws and regulations.