The Securities and Exchange Commission set a new, single-year enforcement high in fiscal year 2016, including a record number of cases involving investment advisers or investment companies, the agency announced Tuesday.
The SEC filed 868 enforcement actions in the fiscal year ended Sept. 30, up from a previous record of 807 actions in fiscal 2015. The actions for 2016 included a record 160 cases involving investment companies or advisers, 98 of which were stand-alone actions opposed to follow-up actions or cases based on delinquent regulatory filings.
Other one-year records set in fiscal 2016 included 21 enforcement actions related to the Foreign Corrupt Practices Act and $57 million distributed to whistleblowers. Total judgments and orders for disgorgement and penalties in all settled actions reached $4 billion.
SEC Chairwoman Mary Jo White said in a statement that in the last three years, “we have changed the way we do business on the enforcement front by using new data analytics to uncover fraud, enhancing our ability to litigate tough cases, and expanding the playbook bringing novel and significant actions to better protect investors and our markets.”
The enforcement division has requested 53 new positions and a 6% budget increase from 2016, part of which the agency said it will spend on litigating more contested cases and on more sophisticated market and data analysis technology. The SEC's office of compliance inspections and examinations is reassigning and adding examiners to look at investment advisers and companies, with a net gain of 100 examiners expected by Dec. 31. The current examination rate of money managers is 10%, covering 30% of assets under management.
SEC officials said in the announcement their most significant enforcement actions in fiscal 2016 included insider-trading and beneficial ownership reporting-related charges against Leon G. Cooperman and Omega Advisors, and FCPA cases against Och-Ziff Capital Management Group. One of what they called “impactful first-of-their-kind actions” was against private equity firm Blackstreet Capital Management for engaging in brokerage activity related to portfolio companies without registering as a broker-dealer.
