Risk & Compliance

SEC Hit Record Enforcement Highs in 2016

The SEC broke records for single-year enforcement actions filed and total dollars gained from forfeitures.
Sean AlloccaOctober 13, 2016
SEC Hit Record Enforcement Highs in 2016

It’s been a busy year for the SEC —  in fact, one of the busiest on record. The Securities and Exchange Commission announced its enforcement results for fiscal year 2016, posting record numbers for actions filed and money forfeited.

The SEC filed 868 enforcement actions, in the year ending Sept. 30, exposing financial reporting-related misconduct and obtaining judgments that totaled more than $4 billion in disgorgement and penalties.

The new single-year high for enforcement actions included 160 involving investment advisers or investment companies and a record 98 stand-alone cases involving investment advisors or investment companies.

“Over 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,” said SEC chair Mary Jo White.

One of the most noteworthy cases of the year was the $415 million suit against Merrill Lynch alleging the company violated the SEC’s Customer Protection Rule. Between 2009 and 2012, the firm freed up billions of dollars each week to fund its own trading activities. Merrill Lynch admitted to misusing customer cash and putting customers’ securities at risk to generate profits.


Image courtesy of the Securities & Exchange Commission

In addition to record settlements, the agency also distributed $57 million to whistleblowers, a single-year high, and filed a record 21 actions under the Foreign Corrupt Practices Act (FCPA).

Other actions included the J.P. Morgan case that resulted in an admission of wrongdoing and a $267 million settlement for failing to disclose conflicts of interest and a violation of the Foreign Corrupt Practices Act filed against telecommunications provider VimpelCom Ltd. that was settled, along with the Justice Department and Dutch regulators, for more than $795 million.