U.S. Securities and Exchange Commission enforcement actions resulted in $4.2 billion in sanctions in fiscal 2015, the commission said on Thursday, about the same level as the penalties leveled the previous year, when it handled 52 fewer actions.
The SEC released its annual synopsis of enforcement efforts a month after an academic study called its enforcement statistics “deeply flawed.”
The SEC, in its results, said that it had filed 807 cases in fiscal 2015, which ended on Sept. 30. That number was higher than the 755 the SEC filed during fiscal 2014, but sanctions were roughly even with the $4.16 billion it imposed during that time.
Last month, an Emory University law professor's draft study found fault with the SEC's metrics for computing annual enforcement statistics.
Law professor Urska Velikonja found that a host of problems, including double-counting cases, has enabled the SEC to "mask the fact that core enforcement has remained steady since 2002." The study, slated to be published in the Cornell Law Review, examined 15 years of data.
"The numbers tell only part of the story," said SEC enforcement director Andrew Ceresney when Reuters asked about the study during a call with reporters about the enforcement results. The breadth and quality of cases are more important than the numbers themselves, Ceresney said. Penalties overall have ballooned from a total of roughly $100 million in around 2002, Ceresney said.
This year included numerous first-of-their-kind cases, the SEC said. They included, for example, a case against a UBS AG unit, which agreed to pay more than $14.4 million to settle charges over regulatory failures in its private U.S. trading platform, known as a "dark pool," that gave some of customers an advantage over others.
The UBS unit neither admitted nor denied the SEC's allegations.
A string of important cases involved financial reporting and auditing, a growing area of focus for the SEC, Ceresney said. In September, for example, accounting giant BDO America admitted that it missed red flags and issued false audit opinions about a client company. The firm, in a settlement, agreed to pay more than $2 million.
Of the 807 actions in 2015, 507 were independent cases that involved federal securities laws violations. Another 300 were against issuers who were delinquent in making SEC filings or proceedings to bar certain individuals because of criminal convictions or other legal orders.
(In first paragraph, please read "52 fewer actions" instead of "100 fewer." In paragraph 3, corrects number of fiscal 2014 cases to 755 instead of 705. In paragraph 6, please read "around 2002" instead of "around 2012" and in paragraph 10 please read 807 instead of 705)
(Reporting by Suzanne Barlyn; Editing by Chizu Nomiyama and David Gregorio)