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August 2013

SEC Announces Three New Enforcement Initiatives

On July 2, 2013, the Securities and Exchange Commission issued a press release announcing three new initiatives of its Division of Enforcement:

  1. The Financial Reporting and Audit Task Force. This task force will identify securities law violations relating to the preparation of financial statements, issuer reporting and disclosure, and audit failures. It will focus on identifying and exploring areas susceptible to fraudulent financial reporting, including ongoing review of financial statement restatements and revisions, analysis of performance trends by industry, and use of technology-based tools such as the Accounting Quality Model.

  2. The Microcap Fraud Task Force. This task force will investigate fraud in the issuance, marketing, and trading of microcap securities. It will develop and implement long-term strategies for detecting and combating fraud in the microcap market, “especially by targeting ‘gatekeepers,’ such as attorneys, auditors, broker-dealers, and transfer agents, and other significant participants, such as stock promoters and purveyors of shell companies.”

  3. The Center for Risk and Quantitative Analytics. This “center” will identify risks and threats that could harm investors, and assist staff nationwide in conducting risk-based investigations and developing methods of monitoring for signs of possible wrongdoing.

D&O and Shareholder Litigation

Tamara Seelman

D&O and Shareholder Litigation