At least one regular reader of this blog site has been after me for months to write something, anything, about the SEC Enforcement statistics for the fiscal year ended on September 30, 2019.
Unfortunately, I don’t have much to say. For the most part the Enforcement report was easy to read and if there were typos in the report I missed them completely. Sure, enforcement actions were down, but at the same time the numbers were not as horrid as I thought they were going to be. Things could have been much much worse, and the number of enforcement actions concerning elderly mainstreet investors seemed to be at an all time high.
I will admit that the number of federal trials stood out to me just as it had in the prior year and from what I can tell the number of trials was exactly the same: five. That doesn’t seem like a lot of federal trials for 120 plus trial unit attorneys but, after all, trials are hard and costly and they take a lot of time and effort; and, in any event, if an investigation is conducted properly the defendants generally will just roll over. So in some respects the fact that a trial occurs is really just the result of an investigative failing. It’s also worth highlighting that the SEC won four of its five federal trials, a win rate of exactly 80 percent — nothing to sneeze at. And, perhaps most importantly, there were no highly publicized trial losses to speak of. That alone should be considered a tremendous achievement, with Division Director awards for all, followed by applause and orchestra music.
I do feel somewhat concerned for the well being of the SEC trial attorneys though. I’m sure that at least a solid handful of them were expecting to get in front of a jury every three years or so, not anticipating that they would be spending nearly all of their working hours shuttered in their offices, immersed in emails, intra-agency disputes and, if fortunate, an occasional litigation issue. These attorneys are in a difficult situation, and for that reason, and for their historical importance to the SEC tradition of excellence, they deserve our compassion.
The SEC in Action 