Lessons From The SEC Speaks In 2012 - Enforcement Themes & Trends

Author:Mr Kurt Wolfe
Profession:McGuireWoods LLP

Last Friday, the U.S. Securities and Exchange Commission held its annual "SEC Speaks" conference, which offers a glimpse into the prevailing trends and priorities at the Commission. As always, the Commission devoted a significant amount of time to exploring and explaining the undertakings of its Division of Enforcement. During the conference, some noteworthy themes and trends emerged with regard to the SEC's enforcement priorities, which we address below.

SEC Chairman Mary Schapiro set the tone during her opening remarks at the conference, which emphasized the Commission's ability to "aggressively and effectively" fulfill its mandate to "protect investors and ensure the integrity of [the US] markets." Schapiro explained that the SEC's Division of Enforcement has "revamped its operations, putting additional talented attorneys back on the front lines, creating specialized units, and streamlining procedures." According to Schapiro, "last year the SEC brought a record 735 enforcement actions" and "obtained $2.8 billion in penalties and disgorgements." Schapiro insisted that "there are more actions to come."

The SEC Whistleblower Program

Chairman Schapiro highlighted the efforts of the SEC's new Office of the Whistleblower, noting that in 2011 the Commission "established a whistleblower program that is already providing the agency with hundreds of higher-quality tips, helping us to avoid investigatory dead-ends and – and the same time – prodding companies to enhance their internal compliance programs."

Sean McKessy, Chief of the SEC's Office of the Whistleblower, offered additional insight. He explained that the Whistleblower Office's "number one priority" is acting as liaison between whistleblowers and the Division of Enforcement. Other priorities for McKessy's office include:

Communicating with whistleblowers and their counsel, including responding to inquires about the process for submitting tips and/or claiming an award. Triaging tips, complaints and referrals received from whistleblowers, which the office is receiving at a rate of approximately seven per day. Tracking the SEC's growing inventory of settled cases to indentify matters that might have arisen from a whistleblower complaint. Processing claims for awards based on settled cases. With respect to the oft-repeated complaint that the SEC's whistleblower rules do not require whistleblowers to report internally before submitting a tip to the Commission, McKessy underscored the...

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