The Securities and Exchange Commission brought a record-breaking number of enforcement actions in fiscal year 2014, but it’s not the volume of cases that has legal, compliance, and audit executives raising their eyebrows, it’s whom they targeted.
Gatekeepers, including those in the legal, compliance, and audit areas, are more commonly on the defensive end of several SEC enforcement actions. In fiscal year 2014, the SEC said it charged three compliance officers and one audit committee chairman for failing to perform effective oversight. The agency charged three compliance officers for similar oversight failures in 2013, according to analysis performed by Gibson Dunn & Crutcher. Such enforcement actions could become more common. During a keynote speech at Compliance Week 2014, SEC Enforcement Director Andrew Ceresney warned that the SEC won’t hesitate to pursue companies and executives for compliance lapses when they fail to act appropriately to stop securities fraud.
