SEC enforcement actions against broker-dealers up 20%

But overall activity in first half of the government's fiscal year remained on par with the same period last year

Apr 20, 2017 @ 12:07 pm

By InvestmentNews

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SEC enforcement actions against broker-dealers were up 20% in the first half of the government's fiscal year, and now account for a quarter of all enforcement actions by the agency, according to a report from Cornerstone Research.

Last year during the October-through-March period, actions against broker-dealers accounting for one-fifth of the SEC's enforcement activities.

Despite changes at the top of the agency for part of this period due to the new administration, overall enforcement activity by the Securities and Exchange Commission remained at previous-year levels, according to a release from the research firm.

The SEC filed 334 enforcement actions during this fiscal year's first half, down from 372 filings during the same period a year earlier, largely due to a 50% decrease in actions against delinquent filers. Excluding those actions, there were 299 actions in the first half of fiscal 2017 — virtually unchanged from the same period last year.

(More: SEC chairman nominee Clayton not asked about key adviser issues)

The report noted that the vast majority of SEC actions filed (80%) continued to come in the form of administrative proceedings rather than civil actions.

In addition to the increase in actions involving broker-dealers, the data revealed a jump of 34% in issuer reporting and disclosure actions, and a 34% increase in actions related to securities offerings. Actions involving allegations of insider trading and violations of the Foreign Corrupt Practices Act decreased.

"In the face of uncertainty brought on by changes in SEC leadership and the new administration, enforcement activity continued last year's heightened pace," said David Marcus, a senior vice president at Cornerstone Research.

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