The SEC’s 2010 restructuring of its Enforcement Division has resulted in the agency taking on more complex cases with a new level of expertise.
The SEC has hired specialists, including highly educated analysts who understand quantitative and high-frequency trading to assist the SEC with its enforcement investigations. The experts act in both the SEC’s enforcement and examination functions, and have assisted the SEC in not only in developing new cases but also providing insight into existing, very complicated investigations over many areas.
However, resources have been tightened at the SEC. In 2002, the agency could devote 25 examiners to each $1 trillion in assets under management; today, that figure has shrunk to 10 examiners for about every $1 trillion in assets.
Given resource restraints, the SEC is trying to bring more timely cases to increase its impact. In any event in 2012, the SEC brought 29 separate actions involving alleged misconduct occurring during the financial crisis that named 38 individuals, including 24 chief executive officers and chief financial officers. Approximately 117 defendants were involved in alleged illegal activity during the financial crisis, leading to about $2.2 billion in monetary relief.
In short, the SEC claims it has not missed a beat – one wonders if the evidence bears it out.