The SEC attributes part of the decline in enforcement actions to shrinking staff levels. The commission's budget remained flat at $888 million over the past two fiscal years, and the number of staffers in the enforcement division declined during that time by 3.5 percent. However, there are still more employees on the payroll today than there were in 2003, when the enforcement division had 935 workers compared with this year's 1,189.

A hiring freeze and high turnover of senior positions likely slowed the process of bringing actions against companies, says Ryan, now a partner in the Washington, D.C., office of Atlanta-based King & Spalding LLP. Other legal experts told Dow Jones that the SEC's budget would need to at least triple to be sufficiently funded. According to Nester, the SEC does plan to increase its staff size by filling vacancies, but has not decided how many new employees it will bring in or when.

Ryan theorizes that the SEC's enforcement tactics have made a difference. "From my observation, people are much more compliance-oriented now," he says. "That could account to some degree for the drop-off in the number of cases."

While the latest numbers and the Government Accountability Office may call the volume of SEC enforcement actions into question, the regulator isn't shying away from taking on more cases that could lead to enforcement action. Cox recently announced that more charges are ahead for companies and individuals being investigated for backdating stock options.

• « previous
• 1
• 2