SEC’s Enforcement Division To Redress Legal And Regulatory Violations

Addressing a legal gathering on December 1, Linda Thomsen, the director of the Securities and Exchange Commission’s Enforcement Divison says that the division plans to cover all areas regarding enforcement topics in the coming fiscal year, including:

· Misconduct in over-the-counter securities markets. This often involves fraud victims who are not able to afford their losses.
· Misconduct that affects retail investors.
· Hedge funds.
· Options issues.

While acknowledging that the 574 cases brought by the Enforcement Division during this fiscal year is slightly lower than the high number from a few years back, she attributes this decrease to the fact that enforcement cases go up and down all the time and that her agency has taken on additional responsibilities that they didn’t have in the past. Thomsen emphasized, however, that “we are getting the job done.”

The division’s caseload, according to Thomsen:
· 218 of the 574 cases in fiscal 2006 were civil actions.
· 356 cases were administrative proceedings.
· 24% of these cases were financial fraud cases.
· Broker-dealer cases made up 13% of cases.
· 8% involved insider trading.
· 16% were investment company and investment adviser cases.
· 11% involved offerings.
· 5% involved manipulation.
· 23% “other cases.”

Thomsen said that the division’s goal was to focus on all program areas at all times-even when a particular area was not getting much attention in the news.

It is interesting to note, however, that the SEC filed just 574 cases in 2006, even though they receive over 40,000 complaints from investors ever year. Moreover, only 13% (75) of those cases were brought by the SEC against securities brokers.

In the meantime, securities arbitration law firms file 5,000 cases every year against stockbrokers and their firms on behalf of investors. (That number is 80 times the number filed by the SEC.) Shepherd Smith Edwards & Kantas LTD LLP is one of those law firms. To schedule an appointment to speak with one of our attorneys for a free, no obligation consultation, contact Shepherd Smith Edwards & Kantas LTD LLP today.

Related Web Resource:

SEC Division of Enforcement