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SEC Likely to Take More Enforcement Actions Against Public Companies

A recent report from the New York University Pollack Center for Law & Business and Cornerstone Research reveals enforcement actions on the part of the U.S. Securities and Exchange Commission (SEC) against public companies and their subsidiaries have increased at a faster rate than all other types of enforcement actions over the last four years. These actions have increased by about 130 percent since 2013, compared to approximately 61 percent on other independent enforcement actions.

In 2016, the SEC brought 92 enforcement actions against public companies and/or their subsidiaries — the single-highest total for any year for which data is available. This is an increase over 2015, which saw 84 enforcement actions.

Of these 92 actions, the most common involved issuer reporting and disclosure, followed by actions taken against investment companies and advisors and Foreign Corrupt Practices Act (FCPA) violations. Approximately 97 percent of all defendants settled the claim with the SEC when the enforcement action was filed, and the agency noted defendants cooperated in 55 percent of these cases.

More actions coming in 2017

While there is some uncertainty, mostly due to the change in administration in Washington, D.C, recent trends indicate the SEC will continue to pursue more enforcement actions in 2017. This is due in large part to a greater awareness of the whistleblower program and an increasing level of quality in the tips the agency says it is receiving.

If you would like to learn more about serving as a whistleblower through the SEC’s incentive program, contact an experienced Dallas attorney at Whistleblower Law for Managers today.

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