SEC Director Summarizes COVID-19 Enforcement Actions

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On May 12, 2020, Steven Peikin, the Co-Director of the Securities and Exchange Commission’s Division of Enforcement (the “Division”), remotely presented a keynote address at the Securities Enforcement Forum summarizing actions that the Division has taken in connection with the COVID-19 pandemic.  Mr. Peikin emphasized that COVID-19-related enforcement matters are a top priority for the Division.  In particular, the Division’s primary focus has been on (i) actively monitoring trading activity around announcements made by issuers in industries particularly impacted by the COVID-19 pandemic and (ii) investigating disclosures, impairments or valuations that may attempt to disguise previously undisclosed problems or weaknesses as related to the COVID-19 pandemic.  The Division has developed a systematic process to review public filings from issuers in highly-impacted industries, with a focus on identifying disclosures that appear to significantly differ from others in the same industry.  Mr. Peikin urged companies to follow their disclosure controls and procedures to protect against the improper dissemination and use of material non-public information given the increased number of corporate insiders with access to, and the potential increased value of, such information given the current volatile market conditions.  Since February 7, 2020, the Division has suspended trading in the securities of more than 30 issuers as a result of questions about the adequacy and accuracy of COVID-19-related information.  A link to the full remarks can be found here.

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