SEC enforcement of advisers drops in Trump era

The agency pursued 82 cases against advisers and firms in fiscal year 2017, down from 98 the previous year

Nov 15, 2017 @ 7:00 pm

By Ryan W. Neal

The Securities and Exchange Commission has relaxed enforcement under the administration of President Donald J. Trump.

In a report the agency released Wednesday evening, the SEC stated that in fiscal year 2017 it pursued 82 standalone cases against investment advisers and firms, down from 98 the previous year. These exclude follow-up proceedings or cases based on delinquent regulatory filings.

In total, the SEC filed 754 enforcement actions in fiscal year 2017, filing 114 fewer cases than it did in 2016. Last year, the SEC filed a record number of total enforcement actions across its purview — 868 — and collected more than $4 billion in disgorgement and penalties.

This fiscal year, all told, parties involved in cases were ordered to pay a total of $3.8 billion in disgorgement and penalties. The total money collected by the SEC decreased nearly $300 million from the previous year.

The agency attributed the decline to 84 actions brought in 2016 as part of the Municipalities Continuing Disclosure Cooperation initiative, a self-reporting program targeted to misstatements and omissions in municipal bond offerings.

In the report, Stephanie Avakian and Steven Peikin, co-directors of the SEC's enforcement division, laid out five core principles they said would guide decision-making behind their approach to enforcement. The agency would focus on protecting the long-term interests of retail investors; pursuing individual wrongdoers; keeping pace with technological change; imposing sanctions on a case-by-case basis rather than a "formulaic or statistics-oriented approach;" and constantly assessing the division's allocation of resources.

"We do not face a binary choice between protecting Main Street and policing Wall Street," Ms. Avakian and Mr. Peikin wrote in the report. "Simply stated, our oversight of Wall Street is most effective, and protects those who need it most, when viewed through a lens focused on retail investors."

The agency's Retail Strategy Task Force, focused on the type of misconduct that often targets retail investors, aims to use technology and data analytics to identify large-scale wrongdoing. Established in late September, the retail task force won't pursue cases itself but will advise its enforcement colleagues about where to focus their efforts.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

FPA's Shannon Pike: What's next for the financial advisory profession?

As we head toward 2019 and beyond, regulation and compensation will continue to dominate the headlines. Shannon Pike of the FPA explains.

Latest news & opinion

10 richest towns in America

These are the wealthiest American towns in the U.S. right now, according to a report from 24/7 Wall St. that concludes higher educational attainment contributed to higher-paying jobs in these locations.

What millionaires look for in an adviser

A list of factors that high-net-worth individuals will pay more for in regards to an adviser.

LPL rolls back recruiting policy aimed at driving more assets to its corporate RIA

LPL erases $50 million hurdle for new advisers to join so-called hybrid firms.

Don't be fooled by the numbers — the industry is in a dangerously vulnerable state

Last year's stock market gains helped advisers turn in solid growth in assets and revenue, but that growth could disappear in the next market downturn.

Divided we stand: How financial advisers view President Trump

InvestmentNews poll finds 49.2% approve of his performance, while 46.7% disapprove. How has that changed over the course of his presidency?

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print