The SEC’s New Financial Fraud Task Force: Being Prepared for Tomorrow Today – Part I, Introduction

SEC recently announced the creation of a new Financial Reporting and Audit Task Force in the Division of Enforcement along with a Center for Risk and Quantitative Analysis . The new groups come as the agency refocuses its enforcement program in the post market crisis era. The implications of these actions...

The SEC’s New Financial Fraud Task Force: Part II, The “Numbers Game Speech”

This is the second in a series of articles examining the creation of the new Financial Reporting and Audit Task Force along with a Center for Risk and Quantitative Analysis. Today’s article begins an examination of the roots of the new Task Force starting with the “Numbers Game” speech...

The SEC’s New Financial Fraud Task Force: Part III, Cases Following the Speech – Revenue Enhancement

This is the third in a series of articles examining the creation of the new Financial Reporting and Audit Task Force along with a Center for Risk and Quantitative Analysis. Today’s article examines select cases concerning improper revenue enhancement techniques used by issuers in actions brought...

The SEC’s New Financial Fraud Task Force: Part IV, Significant Cases Following the Speech – Distorting Trends and Balance Sheet Items

This is the fourth in a series of articles examining the creation of the Financial Reporting and Audit Task Force along with a Center for Risk and Quantitative Analysis. Today’s article examines select cases brought in the wake of Chairman Levitt’s Numbers Game speech in which issuers and...

The SEC’s New Financial Fraud Task Force: Part V, Significant Cases Following the Speech – Using Multiple Improper Techniques

This is the fifth in a series of articles examining the creation of the Financial Reporting and Audit Task Force along with a Center for Risk and Quantitative Analysis. Today’s article examines select cases brought in the wake of Chairman Levitt’s Numbers Game speech in which issuers and...

The SEC’s New Financial Fraud Task Force: Part VI, The Market Crisis and a Change of Direction

This is the sixth in a series of articles examining the creation of the Financial Reporting and Audit Task Force along with a Center for Risk and Quantitative Analysis. Today’s article examines select financial fraud cases brought in the wake of the market crisis which represent a change in focus...

The SEC’s New Financial Fraud Task Force: Part VII, Risk Analysis and Big Data

This is the seventh in a series of articles examining the creation of the Financial Reporting and Audit Task Force along with a Center for Risk and Quantitative Analysis. Today’s article examines new approaches instituted by the Enforcement Division following its reorganization that center on risk...

The SEC’s New Financial Fraud Task Force: Being Prepared for Tomorrow Today – Analysis and Conclusion

This is the eighth and concluding segment in a series of articles examining the creation of the Financial Reporting and Audit Task Force along with a Center for Risk and Quantitative Analysis. Today’s article analyses the likely focus of the New Task Force, suggesting steps that issues can take...

SEC: Claimed Investment Adviser Defrauded Brokers, Investors

The Commission has brought a number of suits against investment advisers, money managers and their affiliates in recent weeks. See, e.g.,SEC v. Falcone, Civil Action No. 5027 (S.D.N.Y.)(recently settled action against Philip Falcone); SEC v. Dearman, Civil Action No. CV-553 (N.D. Okla. Filed Aug. 27...

Toward a New SEC Enforcement Doctrine

Four years ago the SEC reorganized and refocused its Enforcement program. Specialty groups were added. Expertise was brought in to bolster the capabilities of the Enforcement Division. Record numbers of cases were brought. There can be no doubt that a program which rejuvenated in the wake of a series...

The SEC’s Operation Broken Gate: Holding Gatekeepers Responsible

Operation Broken Gate is the SEC’s effort to hold gatekeepers accountable. In announcing the initiative, the agency filed three actions involving auditors. Two were settled while a third is in litigation. The action which will be set for hearing is against sole practitioner John Kinross-Kennedy...

The New SEC Chair Addresses Market Structure

SEC Chair Mary Jo White has been reshaping the agency in the months since she joined the Commission. A new “get tough” policy has been adopted. Settlement procedures for enforcement cases have been modified to require admissions in select cases. A new financial statement fraud task force...

SEC Enforcement: Is the Swagger Back?

The swagger is back according to SEC enforcement officials. Presumably that comment is meant to say that an enforcement program which once was viewed as among the best in government has returned to that rarified echelon. To be sure there is a lot of positive buzz about the program. New Chair Mary Joe...

Compliance, Remediation and Effective SEC Enforcement

Compliance is a critical function for a public company. While it can be viewed as simply a “cost of doing business” perhaps it is better considered as a critical business component, helping create a market place brand of a fair and ethical dealing reflecting its culture. That image, of course...

For the SEC, a Continued Focus on the Municipal Bond Market

Municipal bond offering cases have become an enforcement priority for the SEC. In recent months the Commission has brought a series of actions against the City of Miami, the West Clark City School District and others. Now the agency has brought two proceedings related to bonds issued by a municipal...

SEC Enforcement: Prosecutor or Market Regulator?

The SEC enforcement program has been the subject of significant commentary in the wake of its new “get tough” policy. The new approach demands admissions to settle, similar to those required in criminal cases creating the image of a harder-edged enforcer that will hold defendants accountable...

SEC Commissioner Piwowar Calls for a New Special Study of the Securities Markets

A new Special Study of the Capital Markets should be undertaken, according to SEC Commissioner Michael Piwowar. Specifically, “we should commence – in short order – a comprehensive, multi-year equity market structure review program . . .” This will permit us to “set our...

The SEC: The Future Path of Enforcement (Part III)

This is the third of a four part series projecting the path of SEC Enforcement. Parts I and II of this series looked back at 2013 and examined select cases which may influence the future path of SEC enforcement. This segment focuses on the path being charted for the Enforcement Division by a new Commission...

The SEC: The Future Path of Enforcement (Conclusion)

This is the fourth and concluding segment of this series projecting the path of SEC Enforcement. Parts I and II of this series looked back at select cases brought by the Commission during 2013. Part III considered the projected path of SEC Enforcement based on remarks by members of the Commission...

Another Trial, Another Loss For The SEC

One of the basic tenants of the new SEC “get tough/omnipresent” policy is winning at trial. Courtroom wins earn the program respect, aiding the overall enforcement effort. Yet the Commission seems to have difficulty doing that. Despite what the agency claims is a good courtroom track record...

SEC Announces National Exam Program Priorities

The SEC National Examination Program announced its 2012 examination priorities. Those priorities are selected by senior staff from the National Exam Program’s offices along with senior SEC staff from the various Divisions and offices. Many of those priorities tie to areas of focus for the Enforcement...

SEC Chair: It Will Be a Busy Year For Enforcement

SEC Chair Mary Jo White outlined the 2014 agenda for the SEC in recent remarks. SEC Chair Mary Jo White, 41 st Annual Securities Regulation Institute, Coronado, California (Jan. 27, 2014)(here). Portions of the agenda focused on technology and rule making initiatives. A key segment focused on Enforcement...

SEC Enforcement – Deterrence, Prevention or Both?

The Commission’s current enforcement approach was detailed by Chair Mary Jo White in a speech delivered to the Australian Securities Investment Commission. In remarks titled “Perspectives on Strengthening Enforcement,” delivered on March 24, 2014 ( here ), Ms. White discussed first...

Two SEC Insider Trading Cases Involving Spouses

The SEC filed two settled insider trading cases in which the husband is alleged to have misappropriated inside information from his wife. In each instance the husband understood he was not to trade. Yet in each case the husband traded and profited. In each case the husband settled with the Commission...

SEC Commissioner Piwowar On Enforcement Policy

Commissioner Michael Piwowar, the only economist currently on the Commission, outlined his views regarding enforcement policy in remarks delivered at the Securities Enforcement Forum 2014 last week ( here ). That policy begins with the due process clause of the Fifth Amendment, the Commissioner stated...