SEC had a busy 2020, and the year’s not over!

Supervision failures cost three Citibank affiliates $4.5 million
October 7, 2020

“The best-laid plans of mice and men…”

 It was only a year ago at SEC Speaks 2019, that Securities & Exchange Commission (SEC) Chairman Jay Clayton listed seven “factors that could cause the Commission’s actual results to differ from expected results. One he mentioned would be the need to divert resources to respond to major and unexpected events.”

 And voila! Here we are – 2020. And the SEC has faced a “major and unexpected event” in the form of the global COVID-19 pandemic. Still, Clayton noted, despite the health, operational, and performance stresses, the SEC remained fully operational.

 What does a fully operational SEC mean for you during COVID-19?

Pretty much business as usual. The regulators are still busy. Clayton said he was “pleased to report that while the pandemic significantly impacted how we do our work; it did not negatively impact the work itself.”

 Rather, he noted: “Our planned oversight, examination, rulemaking, and enforcement work continued with vigor, rigor, and transparency.”

 The SEC, he continued, added to its workload by:

 

  1. Providing targeted regulatory relief to ensure the continued operation of US markets:
  2. Working continuously with domestic and foreign regulatory counterparts to monitor and mitigate the impacts of COVID-19; and
  3. Increasing oversight and engagement in critical areas of stress. 

 

SEC brings 700 + enforcement actions in FY 2020

According to Clayton, the SEC’s Division of Enforcement brought over 700 actions in FY 20, a significant percentage of which were brought after March 15 – when the country went into lockdown. And the Commission secured financial remedies of more than $4 billion – more than that secured in 2019.  During the pandemic, the Division has issued three dozen trading suspensions, six COVID-related fraud actions, and over 150 newly opened COVID-related investigations and inquiries. And 39 individual whistleblowers were awarded approximately $175 million — more, much more, said Clayton, than in any prior fiscal year. 

 OCIE examinations continue at full speed

Clayton reported that the SEC’s Office of Compliance Inspections and Examinations conducted exams of 15 percent of all SEC-registered investment advisers and verified 4.8 million investor accounts totaling $3.4 trillion in assets.

 Disclosure reviews are also up – more than 7% over the same time last year, in addition to 3,500 reporting company filings, and 800 IPO registration statements and initial registrations.

 More globally, Clayton said, the Office of International Affairs observed a significant increase in requests from foreign authorities for Commission assistance (nearly 700 of them) and requests for Commission staff to assist (approximately 1,684) this year

 What does the SEC’s pandemic performance mean for the financial services industry?

This is not a time to rest on compliance laurels! The regulators are still looking for chinks in your organization’s armor – albeit from their home offices. Which means that compliance continues marching on. And that’s where we come in. For more than 25 years, Patrina has been helping compliance professionals like you stay on the “straight and narrow” efficiently and cost-effectively.

 So, let’s talk. Call 212-233-1155 to ask about Patrina’s cost-effective, designated third-party services, our comprehensive, 8-module compliance solution, and compliant data capture, file storage, and records archiving specifically designed for the financial services community. Be smart. Be covered.

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