After a surge in FY 2014, the number of trials that the SEC is completing in federal court appears to be drying up.
In February 2014, I observed that several factors had converged to spur an increase in SEC trials, and that these factors would likely continue to push up the number of SEC cases that went to trial in the future. These factors included the fact that SEC Chair Mary Jo White believed that trials were an important way for the SEC seek public accountability from defendants and to develop “a full factual record of wrongdoing that should foster better development of the law.” In addition, under the SEC's change in settlement policy in June 2013, the SEC began demanding admissions in certain egregious cases. "This new policy will surely result in more cases going to trial," I opined, because some defendants would be unwilling to admit to wrongdoing as part of a settlement.
The number of SEC trials did surge in FY 2014 (which ended September 30, 2014). In FY 2014, the SEC had 30 cases go to trial -- the largest number of trials in 10 years -- and more than five times the number of jury trials than in FY 2013. By my count, these 30 trials included 18 cases in federal court. Since the end of FY 2014, however, the number of SEC trials in federal court has tapered off significantly.
By my count, here are some statistics on SEC federal court trials since the end of FY 2014:
The SEC completed six federal court trials in FY 2015, or one-third of the 18 such trials in FY 2014.
In the trailing twelve months, the SEC has completed four federal court trials.
In the first two months of FY 2016 (which began October 1, 2015), the SEC has completed zero federal court trials.
It is not clear what, if anything, is the cause of this decline. It may just be an aberration from a relatively small sample size of 14 months. It could also be the result of more cases being litigated in this period as administrative proceedings rather than in federal court -- I will explore whether there are data to support the latter explanation.