United States: A deep dive into fiscal year-end SEC and CFTC enforcement strategies

In brief

The last thirty days in September, the end of the US federal government’s fiscal year, is generally an important time to analyze enforcement activity by the US Securities and Exchange Commission (“SEC”) and the US Commodity Futures Trading Commission (“CFTC”).

Because all enforcement cases must be reviewed and approved by the SEC and CFTC Commissioners, the end of the fiscal year often poses a logjam in processing enforcement recommendations. As a result, enforcement staff and leaders at the SEC and the CFTC must prioritize enforcement recommendations that they want to have approved by the Commissioners before the end of the fiscal year. Thus, in our experience, enforcement cases filed at the end of the fiscal year (and for the SEC, particularly ones accompanied by a press release as opposed to a typical administrative or litigation release), are strong indicators of issues currently in the regulators’ crosshairs and set the tone for enforcement hotspots and priorities for the next fiscal year.

In this short video, Baker McKenzie Partner Peter Chan, a former SEC Assistant Director of Enforcement, provides his “inside baseball” insights regarding the importance of the timing of some of these enforcement actions.

Click here to read the full alert.

Author
Peter Chan

Peter K.M. Chan is a member of Baker McKenzie’s North American Financial Regulation and Enforcement Practice, which provides our clients with a full range of regulatory advice and enforcement counseling.

Peter brings two decades of experience at the US Securities and Exchange Commission (SEC) to his litigation and counseling work. His tenure at the SEC, as well as a stint as Special Assistant US Attorney in the Northern District of Illinois, have given Peter experience with civil and criminal matters. At the SEC, Peter served as assistant regional director in the Chicago regional office, where he led investigations and litigations of high-profile enforcement cases. In the course of his SEC career, he handled corporate issuer disclosure and reporting violations, financial fraud, auditor independence violations, insider trading, broker-dealer misconduct and failure to supervise cases, hedge fund and investment company fraud, and Dodd-Frank and Sarbanes-Oxley violations. As the head of the Municipal Securities and Public Pensions Unit at the SEC’s Chicago office, he oversaw cases involving municipalities and public pensions throughout the Midwest, including disclosure failures by states, cities, and underwriters in municipal bond offerings; pay-to-play and public corruption; and securities fraud victimizing municipalities and public pensions.

Peter also served in national leadership roles within the SEC’s Enforcement Division. Peter acted as national leader of the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative. He also served as co-chair of the Priorities and Resources Subcommittee of the Division of Enforcement Advisory Committee and was one of the original architects of the SEC Financial Reporting and Audit Task Force.

Peter’s experience in criminal securities fraud cases includes serving as Special Assistant US Attorney in the Northern District of Illinois in a criminal investigation into market abuse by a Chicago broker-dealer, resulting in guilty pleas by several senior executives at the firm.

In 2014, Peter received the SEC’s prestigious Paul R. Carey Award for his [e]xceptional personal commitment and effectiveness as a member of the Division of Enforcement.

Author
Jessica Nall

Jessica is a partner in our San Francisco and Palo Alto offices. For more than two decades, she has been deeply involved in defending a range of preeminent government enforcement cases in the tech industry in California and beyond. Jess has helped a number of well-known public and private companies navigate high-profile crisis situations involving cutting-edge government enforcement and compliance issues. She has handled dozens of internal investigations for tech companies and has defended executives, employees, and groups of witnesses as “pool counsel” in cases at the forefront of evolving government enforcement including trade secrets and economic espionage, crypto-currencies, blockchain, and financial technology.

Clients appreciate Jess for her practicality, complex strategic thinking, and deft ability to assemble effective defense teams domestically and across the globe.

Author
Gavin Meyers

Gavin Meyers is a senior associate in Baker McKenzie’s Financial Regulation and Enforcement Practice Group in North America. Gavin is an experienced regulatory lawyer advising broker-dealers, investment advisers, FinTech and cryptocurrency firms on regulatory, enforcement and compliance matters involving federal and state securities laws, FINRA rules and money transmission regulations.

Prior to joining the Firm, Gavin was Senior Legal Counsel at a start-up FinTech broker-dealer and crypto-trading platform where he managed the firm’s US money transmitter licensing (MTL) applications and advised the firm’s various entities on broker-dealer and crypto-related regulatory obligations and strategic business decisions. Gavin also previously was Assistant General Counsel at a global financial services firm where he provided practical guidance to business, supervision, and compliance groups regarding securities regulations and FINRA rules, including implementation of the Securities and Exchange Commission (SEC)’s Regulation Best Interest. Gavin also served as Senior Counsel in the Office of General Counsel at the Financial Industry Regulatory Authority (FINRA) where he was responsible for providing guidance on complex regulatory initiatives and FINRA rules and developing and drafting regulatory guidance and rule filings for submission to SEC. He also served in FINRA’s Office of Fraud Detection and Market Intelligence (OFDMI) where he conducted regulatory investigations involving insider trading.

Story from globalcompliancenews.com