The SEC recently announced that it brought a record 868 enforcement actions in fiscal year 2016, which closed on September 30. As in prior years, these cases were brought against a broad spectrum of players in the financial industry – including investment advisers, investment companies, industry gatekeepers and broker-dealers – covering a wide range of securities law violations, including insider trading, market manipulation, delinquent filings and Foreign Corrupt Practices Act violations. SEC Chair Mary Jo White stated in the press release that the agency’s enforcement program is a “resounding success.” She credited the increase in actions to the use of new data analytics to uncover fraud, which has enhanced the SEC’s ability to litigate such cases and its capability to bring novel and significant actions to protect investors and the markets. For more on the SEC’s use of technology in the examination process, see “SEC’s Rozenblit and Law Firm Partners Explain the SEC’s Enforcement Priorities and Offer Tips on How Hedge Fund and Private Equity Managers Can Avoid Enforcement Actions (Part Three of Four)” (Jan. 15, 2015); and “OCIE Director Andrew Bowden Identifies the Top Three Deficiencies Found in Hedge Fund Manager Presence Exams and Outlines OCIE’s Examination Priorities” (Oct. 10, 2014). This article summarizes key data from the report relevant to hedge fund and private equity managers and includes reactions from industry experts regarding the SEC’s enforcement priorities.
Oct. 20, 2016
What the SEC’s Enforcement Statistics Reveal About the Regulator’s Focus on Hedge Funds and Investment Advisers
- Kara BinghamHedge Fund Law Report
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