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SEC Announces Record Number of Investment Adviser Cases for FY 2016

The Securities and Exchange Commission announced its enforcement results for fiscal year 2016, reaching new highs in the number of actions filed and money ordered forfeited through disgorgement and penalties.  The SEC noted that it brought the most ever cases involving investment advisers or investment companies, including 8 enforcement actions related to private equity advisers, an area that has clearly been a priority for the Commission over the past year, and a record 21 cases under the Foreign Corrupt Practices Act, an area of increasing importance to the SEC. 

The SEC reported new highs in several areas, including in the number of enforcement actions filed (868 total, with 548 independent or standalone actions), actions involving investment advisers or investment companies (160 total, with 98 independent or standalone actions), and actions under the Foreign Corrupt Practices Act (21 total), imposing over $4 billion in disgorgement and penalties and distributing $57 million to whistleblowers.  Compared to 2015, the SEC also filed more “follow-on” administrative proceedings to bar persons or entities from the securities industry, based on a prior entry of a civil injunction or a criminal proceeding.

Yearly data from 2014 through 2016 is summarized in the table below:

Fiscal Year

2014

2015

2016

Independent/Standalone Actions

413

507

548

Follow-on Administrative Proceedings (i.e., SEC Proceedings initiated following conviction or injunction in District Court)

232

168

195

Delinquent Filings

110

132

125

Total Actions

755

807

868

Disgorgement and Penalties Ordered

$4.16 billion

$4.19 billion

“Over $4 billion”

© 2019 Proskauer Rose LLP.

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About this Author

William D Dalsen, Proskauer, Private Equity Lawyer, Hedge Fund Litigation Attorney
Associate

Will Dalsen is an associate in the Litigation Department, practicing in the Patent Law, Intellectual Property, and Private Equity & Hedge Fund Litigation groups.

Will practices in the area of complex intellectual property disputes, with a primary focus on patent infringement matters. He has litigated several high-profile patent infringement cases for some of the world's leading technology companies, including Panasonic, Philips, Sony, Mitsubishi and Zenith Electronics.

His practice also includes complex commercial...

617.526.9429
Timothy W. Mungovan, Litigation Attorney, Proskauer Law Firm
Partner

Timothy Mungovan is a Partner in the Litigation Department, co-head of the Private Investment Funds Disputes practice and a member of the Private Investment Funds Group. Tim has an international practice in complex commercial litigation, advising public and private companies in a variety of areas, including securities, corporate governance, fiduciary obligations, investment management and financial services, fraud and trade secrets.

In addition to his regular commercial litigation practice, Tim focuses on disputes involving private investment funds including hedge, private equity and venture capital funds and other limited partnerships. He has advised funds, fund sponsors, investment advisers, managers, principals, feeder funds, institutional and individual investors in various disputes, including control contests, partnership disputes, restructurings, removal of a general partner and claims of fraud. He is widely recognized for litigating hedge fund fraud and representing investors in redemption disputes.

617-526-9412, 212-969-3201
Joshua Newville, Proskauer Rose, regulatory enforcement attorney, industry compliance legal counsel, securities exchange commission lawyer
Partner

Joshua M. Newville is a partner in the Litigation Department in New York. His practice focuses on commercial litigation and regulatory investigations. Mr. Newville advises companies and individuals in securities litigation and compliance matters. He also focuses on internal investigations and enforcement matters. Prior to joining Proskauer, Josh was senior counsel in the U.S. Securities and Exchange Commission’s Division of Enforcement, where he investigated and prosecuted violations of the federal securities laws. Josh served in the Enforcement Division’s Asset...

212-969-3336
Michael R. Hackett, Litigation Attorney, Proskauer Law Firm
Associate

Michael R. Hackett is an associate in the Litigation Department and a member of the Asset Management Litigation practice. His practice focuses on disputes and regulation involving private funds, including private equity, venture capital, hedge, real estate and private credit funds, as well as other limited partnerships, where he regularly advises funds, fund sponsors, investment advisers and institutional and individual investors.

Mike’s experience representing private fund clients runs the gamut, from control contests within advisers, to...

617-526-9723
Anthony M. Drenzek, Special regulatory Counsel, Proskauer Rose, Attorney, Finance Policy Lawyer
Special Regulatory Counsel

Tony is special regulatory counsel in the Corporate Department and a member of the Private Funds Group and the Private Equity & Hedge Fund Litigation team. His practice focuses on advising U.S. and offshore private fund managers on all aspects of federal, state and SRO organizational and operational compliance, with a specific emphasis on the Investment Advisers Act of 1940.

Tony assists U.S. and offshore private fund clients in registering with the SEC as investment advisers, or reporting as exempt reporting advisers, and complying with...

617.526.9655