As I have previously discussed here in detail, the SEC announced in 2013 that it would be greatly sharpening its focus on accounting fraud cases. Among other things, the agency established a Financial Reporting and Audit Task Force in July 2013 staffed with lawyers and accountants specifically focused on generating new financial reporting and accounting fraud cases for the Enforcement Division. The agency also stated that the work of the Task Force would be aided by several new technologies such as the “Accounting Quality Model” (a.k.a “RoboCop”), and an increasingly strong flow of whistleblower tips.
Recently-released enforcement data (“Select SEC and Market Data”) from the SEC’s FY 2014 have sparked some interesting analyses of whether the SEC’s renewed focus on financial reporting and accounting fraud cases is already bearing fruit. This week, the WSJ reported (“SEC Gets Busy With Accounting Inquiries”) that according to the new data, the SEC filed 99 financial reporting actions in FY 2014 — a 46% increase from the 68 such cases filed in FY 2013. In addition, the WSJ reported that the SEC launched over 100 new financial and accounting fraud investigations in FY 2014, about 30% more than in FY 2013.
