As the big-name enforcement cases from the financial crisis draw to a close, the Securities and Exchange Commission has the “luxury” of freedom to tackle a wide variety of enforcement issues, its enforcement chief says.
While the SEC is expected to announce the enforcement results for fiscal 2014 soon, SEC’s Enforcement Division director, Andrew Ceresney, discussed continued and increased enforcement efforts in insider trading, financial reporting and pyramid schemes Friday morning in New York.
Ceresney called insider trading a “perennial focus” for the enforcement division, which over the past five years he said has brought about 580 cases against individuals.
“That’s a pretty significant number when you think about it,” he said, expanding on some of the tools and opportunities that have helped them reach that number, most significantly “big data.”
“We now have massive amounts of data that we’re able to analyze,” he said.
The SEC is developing analytical tools that use blue sheet data, essentially trading data.
“[We can] use that data to find patterns of trading that might indicate insider trading,” Ceresney said. “What that does is give us the ability to detect insider trading in ways we haven’t been able to do before.”
Already a number of cases have been developed and brought forward because of those tools, he added, with “many more in the pipeline.”
Another traditional focus of the enforcement division has been financial reporting, which Ceresney said has lagged over the past few years.
“If you look at our numbers over the last 4-5 years, our number of financial reporting actions have actually been decreasing,” he said, adding this could be the result of their focus being elsewhere or improvements that were made in 2002.
To combat this, the enforcement division created a task force of 12 attorneys and accountants to look for financial reporting issues that may not be automatically apparent.