SEC Keeps Up Blistering Pace of Enforcements Against Advisors, BDs in 2012

The Securities and Exchange Commission (SEC) continued to file a record number of enforcement actions against investment advisors this year and increased its pace of actions against broker-dealers.

The SEC filed 147 enforcement actions against advisor and investment companies in 2012, one more than last year’s record number, and the number of actions this year against BDs jumped significantly—with the agency filing 134 enforcement actions related to broker-dealers, a 19% increase over the previous year.

The number of whistleblower tips is also on the rise. The agency announced Thursday in its 2012 Annual Report on the Dodd-Frank Whistleblower Program that it had received more than 3,000 whistleblower tips from all 50 states and from 49 countries. The report was required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and summarizes the activities of the SEC’s Office of the Whistleblower.

“In just its first year, the whistleblower program already has proven to be a valuable tool in helping us ferret out financial fraud,” said SEC Chairwoman Mary Schapiro, in a statement.

As to enforcement actions taken in all areas of the SEC’s jurisdiction as of the fiscal year ended Sept. 30, the Commission says that building on last year’s record results, it filed 734 enforcement actions, one shy of last year’s record of 735.

Most significantly, the SEC says “that number included an increasing number of cases involving highly complex products, transactions, and practices, including those related to the financial crisis, trading platforms and market structure, and insider trading by market professionals.” Twenty percent of the actions, the agency says, “were filed in investigations designated as National Priority Cases, representing the Division’s most important and complex matters.”