This is a guest post from Smarsh, originally seen on the Smarsh blog on October 28, 2014.
In 2014, the Securities and Exchange Commission (SEC) hit an all-time high in the number of enforcement actions and fines levied.
With a fiscal year that ended in September, the SEC filed a record 755 enforcement actions, and obtained orders totaling $4.16 billion in disgorgement and penalties, according to preliminary SEC figures.
This marks a significant increase in fines, compared to 686 actions and $3.4 billion in 2013, and 734 actions and $3.1 billion in 2012.
SEC Chair Mary Jo White said the innovative use of technology, including enhanced use of data and quantitative analysis, was instrumental in deterring misconduct, and contributed to the SEC’s success in enforcement and tough sanctions.
The enforcement actions covered a wide range of wrongdoings, including more than 135 parties charged with reporting and disclosure violations. Other cases centered on insider trading, market structure, micro-cap stock fraud, pyramid schemes, municipal securities, and investment adviser fraud.
In the aftermath of the 2008 financial crisis, the frequency of these run-of-the-mill types of cases fell, but now that trend appears to be reversing, and companies of all sizes are facing sanctions for big and small violations. The SEC has also indicated it will continue its aggressive enforcement strategy across ‘the entire spectrum of the financial industry.’ As seen in the 2014 enforcement actions, the SEC is also holding ‘gatekeepers’ (attorneys, accountants and compliance professionals) accountable for the important roles they play in the securities industry.
With these enforcement cases on the rise, it’s now critical to prepare for increased SEC reviews of firm conduct with a comprehensive digital communications archiving solution that includes email, social media, website, instant messaging, and mobile messaging archiving. This type of archiving solution can help your firm apply effective digital record keeping, supervision, and data protection policies to support your compliance program.
Additional data on the SEC’s FY 2014 enforcement results will be available as part of the SEC’s upcoming Agency Financial Report.
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