On November 17, the US Securities and Exchange Commission (SEC) issued its annual Agency Financial Report for the 2014 fiscal year. The report can be accessed here. The report focuses on the accomplishments of the SEC during the previous financial year, such as bringing a record number of enforcement actions as well as proposing and finalizing a number of rules required under the Dodd-Frank Act and the JOBS Act.
Looking forward, the SEC seeks to focus on completing the remaining rulemakings required under the Dodd-Frank Act and the JOBS Act in the 2015 fiscal year. These include disclosure requirements regarding the ratio of CEO compensation to median employee pay, final rules implementing exemptions under the Securities Act for securities-based crowdfunding offerings and the consideration of amendments to address concerns that may arise in permitting issuers to engage in general solicitation and general advertising in Rule 506 offerings. In addition, the SEC announced an intention to pursue comprehensive rulemaking to improve equity market structure, enhance pre-trade transparency in fixed income markets, improve quality of reports and information given to investors in mutual funds and variable annuities, among others.
The SEC also announced an intention to build on their enforcement results in 2014, including by pursuing gatekeepers, such as directors, accountants and lawyers, rather than companies alone, for misconduct charges. The 2014 fiscal year saw the SEC file a record 755 enforcement actions. The SEC reported that it had charged more than 135 parties with violations relating to reporting and disclosure. Given recent comments by SEC officials and the SEC’s desire to continue the momentum behind its enforcement actions in fiscal 2014, we can expect the SEC to continue to focus on enforcing strong penalties on corporate gatekeepers that are found to have engaged in misconduct.