Regulators are upping their game in taking enforcement action against investment advisors. This year, 147 actions were taken, 30% more than in 2010 and almost 200% more since 2000. In 2000, the SEC filed 52 cases.
This Website Is For Financial Professionals Only
Small groups of attorneys called specialty units within the SEC’s Asset Management Unit are particularly targeting money managers, CEOs, or other senior managers upon whom they can pin allegations.
The SEC also brought actions against 134 brokers, a 19% increase over 2011.
Regulators are especially hungry to bring enforcement action in an attempt to redeem themselves from the significant misses that allowed the likes of Bernard Madoff and R. Allen Stanford to slip through.
But the SEC has yet to nail a large infraction. Recently, it lost the case against Bruce Bent and his son Bruce Bent II. The father and son team had been charged with misleading investors about the safety of money market funds.
At the same time, a federal civil trial cleared the two of fraud, although their firm was deemed liable for fraud and Bruce Bent II was found guilty of negligence.
Regulators have also been sharply criticized for not pursuing executives allegedly responsible for the 2008 financial crisis.
So they’re starting to look at day-to-day activities as stand-alone cases instead of how they might impact consumers.
The one caveat is whether the SEC’s budget
will be passed by Congress. Without that budget, its ability to continue the hot pursuit will be significantly compromised.