SEC FY 2014 Enforcement Actions Summary (with Lofchie Comment)

The SEC announced that, in fiscal year 2014, new investigative approaches and an innovative use of data and analytical tools contributed to a record filing of 755 enforcement actions and $4.16 billion in disgorgement and penalties.

The agency's enforcement actions also included a number of first-ever cases, including actions involving (i) the market access rule, (ii) the "pay-to-play" rule for investment advisers, (iii) halting a municipal bond offering (an emergency action) and (iv) whistleblower retaliation.

Chair White noted that, in addition to the first-ever cases, the Municipalities Continuing Disclosure Cooperation ("MCDC") Initiative was an important effort that began in the last fiscal year.

The SEC's enforcement in fiscal year 2014, as detailed in the SEC's press release, focused overall on the following areas:

• combating financial fraud and enhancing issuer disclosure;
• ensuring that exchanges, traders and other market participants operate fairly;
• uncovering misconduct by investment advisers and investment companies;
• increasing activity in the whistleblower program;
• holding gatekeepers accountable;
• rooting out insider trading;
• upholding disclosure standards in municipal securities;
• cracking down on misconduct involving complex financial instruments;
• combating foreign corrupt practices and obtaining the highest-ever penalties against individuals;
• demanding admissions in important cases that enhance public accountability; and
• successful litigation.

Additional data on the SEC's FY 2014 enforcement results will be available as part of the SEC's upcoming Agency Financial Report.

Lofchie Comment: Too much of the public's assessment of the SEC and, indeed, of the SEC's self-assessment is based on the number of litigation cases brought by the SEC, which results in pressure on the SEC to bring even more cases and impose even bigger fines to show "progress." But imposing fines is not a business, nor should it be the best measure of the SEC's success. The primary measure of that success should be whether the SEC is able to adopt and implement rules that are good for the economy.

See: SEC Press Release.