SEC Fines Hit Record $3.4B In 2013

Law360
December 17, 2013


Jordan A. Thomas points to an increase in the quality of the SEC's investigations

"The fact that they're opening so many investigations suggests that the quality of tips they're receiving is improving," Thomas said Tuesday. "Part of that is due to the success of the whistleblower program. The SEC has also become far more sophisticated in collecting and analyzing data."

In the past, the SEC had to collect evidence on its own and build cases from the ground up, but whistleblowers point the commission to the heart of misconduct and let it complete investigations faster, Thomas said. In addition, the SEC's improved analytics systems allow it to search through and share data between offices.

The commission's renewed focus this year on accounting fraud and financial disclosure violations under White — the Financial Reporting and Audit Task Force, Microcap Fraud Task Force and Center for Risk and Quantitative Analytics were all established in July — should strengthen its investigations, but Thomas doesn't expect to see that reflected in the numbers for at least another two years, given the lifespan of SEC investigations.

"The big picture is that the SEC is becoming a more sophisticated and more informed financial watchdog," Thomas said. "The outlook is very bright."