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Industry Spotlight > Broker Dealers

Third of SEC Enforcement Actions in FY '19 Involved Advisors

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The Securities and Exchange Commission brought a diverse mix of 862 enforcement actions in fiscal year 2019, of which 526 were “standalone” actions of which the plurality, 36%, involved advisory and investment company issues.

The securities regulator’s enforcement division notes in its just-released annual report that it also obtained judgments and orders totaling more than $4.3 billion in disgorgement and penalties in fiscal 2019, a jump from the $3.9 billion ordered in 2018.

A total of 38, or 7%, of the standalone actions in fiscal 2019 involved broker-dealers.

Despite a near-total cessation of activity for 35 days due to the government shutdown at the beginning of the year, the number of standalone enforcement actions was nearly 7% higher in fiscal 2019 than last year’s 490 actions. The SEC said the increase was due, in part, to the self-reporting nature and accelerated resolution process of the Share Class Selection Disclosure Initiative.

The commission “brought a broad mix of enforcement actions that addressed a wide variety of misconduct across the spectrum of the securities markets,” co-division chiefs Stephanie Avakian and Steven Peikin said in the report.

“These cases combated wrongdoing by holding individuals, issuers, financial institutions, and other entities accountable, and by stripping wrongdoers of their ill-gotten gains. By removing bad actors from the markets, obtaining effective, tailored remedies, and acting quickly to stop frauds and prevent losses, the Commission’s enforcement actions sent clear and important messages to market participants, and enhanced confidence in the integrity and fairness of our markets.”

The SEC also brought actions involving insider trading (6%), market manipulation (6%), as well as other areas such as the Foreign Corrupt Practices Act (3%) and public finance (3%).

— Check out FINRA’s Top 9 Biggest Investor Arbitration Awards in 2019 on ThinkAdvisor.


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