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SEC Announces Enforcement Initiatives to Combat Fraud

On July 2, the U.S. Securities and Exchange Commission announced three new initiatives designed to focus the Division of Enforcement's efforts on high-risk areas of the market.

The three initiatives are:
The Financial Reporting and Audit Task Force.  This task force will be dedicated to identifying fraud in the preparation of financial statements, issuer reporting and audit failures, with the goal of increasing prosecution of violations in this area. 

The Microcap Fraud Task Force.  This task force will investigate fraud in the issuance, marketing, and trading of microcap securities.  The principal goal of this task force will be to develop and implement long-term strategies for detecting and combating fraud in the microcap market by targeting “gatekeepers,” including attorneys, auditors, broker-dealers, and transfer agents.

The Center for Risk and Quantitative Analytics.  The Center will support and coordinate Enforcement’s risk identification, risk assessment, and data analytic activities by identifying risks and threats that could harm investors.  The Center will work closely with other divisions and offices, and provide guidance regarding how to allocate resources strategically in light of risks.  George S. Canellos, Co-Director of the Division of Enforcement stated the new Center for Risk and Quantitative Analytics will assist in-field staff members by providing them with "analytical techniques and computing capacity with special expertise in data mining" and help these staff translate their market observations to "targeted investigations of national scope."

The SEC’s announcement is available here .

 

 
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