According to a recent report issued by the NYU Pollack Center for Law & Business and Cornerstone Research, SEC enforcement actions against public companies or their subsidiaries have outpaced the overall growth in all enforcement actions over the last four fiscal years, increasing 130 percent from 2013 (compared to 61 percent for all independent enforcement actions). The report analyzes data on all SEC enforcement actions filed and specifically those filed against public company defendants. It also includes information on cooperation by public company defendants in settlement negotiations.
In 2016 alone, the SEC brought 92 actions against public companies or their subsidiaries, the highest in any year of available data, and an increase from 84 actions in 2015. The most common allegations in the actions were related to issuer reporting and disclosure, followed by actions against investment advisors and investment companies and FCPA violations. The overwhelming majority of defendants (97 percent) settled with the SEC concurrently with the filing of the enforcement action. The SEC made note of the defendants’ cooperation in 55 percent of these settlements.
It remains to be seen what 2017 will bring, given the coming change in administration and Chairman White’s departure. However, if historical trends are any indication, we can expect the SEC will continue its current pace of enforcement actions.