Record Year of Enforcement Actions against Investment Advisers

Another Record Year of Enforcement Actions against Investment Advisers

The SEC has just released its most recent statistics on its enforcement program.  Numerous actions were filed against investment advisers in 2012.  Specifically, according to the release, the SEC filed 147 enforcement actions against investment advisers and investment companies, one more than the previous year’s record number.  Several of those actions resulted from the Enforcement Division’s investment adviser compliance initiative, which looks for registered investment advisers lacking effective compliance programs designed to prevent securities laws violations.


The SEC also filed actions charging three advisory firms and six individuals as part of the Aberrational Performance Inquiry into abnormal performance returns by hedge funds.  For more information about enforcement actions resulting from the Aberrational Performance Inquiry, see our previous communique.

Robert Khuzami, Director of the SEC’s Division of Enforcement, attributed much of the SEC’s  record numbers to its recent initiatives to hire industry experts, create specialized enforcement units focused on high-priority misconduct, a flatter management structure coupled with streamlined and centralized processes and improved technology which allows for enhanced ability to collect, process, and analyze data. 

Overall, the SEC announced that it filed 734 enforcement actions in the fiscal year that ended September 30, nearly matching last year’s record total of 735 and that the success rate of the litigated cases was 95%. The SEC’s release can be found here.  Please contact us if you would like additional information on recent enforcement actions against investment advisers.