SEC Identifies 2015 Enforcement Priorities in its Agency Financial Report for Fiscal Year 2014
In November 2014, the SEC released its Agency Financial Report for Fiscal Year 2014. The full report is available here. The SEC reported that it ended its Oct. 1, 2013, through Sept. 30, 2014, fiscal year by bringing 755 enforcement actions and obtaining orders for $4.16 billion in penalties and disgorgement. The SEC credited its success in part to its use of data mining techniques to detect fraud and other securities law violations.
For 2015, the SEC announced its enforcement priorities for 2015. Among other things, the SEC reported that it intends to focus on the following areas:
- Financial reporting and accounting fraud. The SEC stated that its Financial Reporting and Audit Task Force will continue to identify violations relating to the preparation of financial statements, issuer reporting and disclosure, and audit failures.
- Broker-Dealers. The SEC’s Broker-Dealer Task Force will focus on developing and rolling out nationwide initiatives to combat problematic practices such as churning and the failure to comply with anti-money laundering requirements.
- Microcap Fraud. The Microcap Fraud Task Force plans to be proactive by using strategies including trading suspensions and efforts to target repeat players and gatekeepers (i.e., lawyers, accountants, and other professionals).
- Data Mining. The SEC plans to continue to use technology to better process and understand large volumes of data. This includes employing technology to identify and investigate potential violations, including high-risk areas that could harm investors, markets, or regulated entities.