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Articles

Oh the times, oh the customs, oh the fines

December 20, 2013

Articles

Oh the times, oh the customs, oh the fines

December 20, 2013

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The business of enforcing anticorruption is booming, at least according to the numbers announced recently by the Securities and Exchange Commission (SEC). The agency set a record by bringing in $3.4 billion in sanctions against wrongdoers.  That’s a touch higher than last year’s total, which just exceeded $3 billion. Among the contributors to the SEC’s hat were stock exchanges, attorneys, accountants, and the regular bevy of traders and broker-dealers.  Some soon found that money doesn’t buy you what it used to. For instance, Philip A. Falcone and his firm Harbinger Capital Partners had to provide an admission of wrongdoing to go with a hefty fine.

The number of filed enforcement actions did dip a little, dropping down to 686. In the prior two years, the number of filed enforcement actions had exceeded 700. What will be interesting to see, however, is what sort of harvest comes off this year’s crop of investigations. The SEC has new management under Mary Jo White.  She has indicated on several occasions that future settlements will be tougher, with higher fines, and that individuals will be pursued for wrongdoing.

As for investigations in the coming year, we can expect to see a steady search for accounting fraud by the Financial Reporting and Audit Task Force. Short-selling, an area of interest since the global financial crisis of 2008, will continue to be a hot topic. Municipal bonds also, and, of course, you can never count out the FCPA, even if its numbers dipped a bit this year.

This article first appeared on Fish’s Litigation Blog. For more on compliance, please read this related blog post, “Things to pack for your trip to China: 1) socks, 2) tie, 3) compliance…4) more compliance.

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