One of the things we used to be able to count on was a surge in SEC enforcement settlements during the last several weeks of September. The agency always seemed to time a healthy chunk of high-profile enforcement actions to coincide with the government’s September 30 fiscal year end, but that didn’t happen this year – and I’m not the only one who noticed.  Here’s what Michelle Leder from Footnoted.com had to say:

For as long as I’ve been covering the SEC, September has always been something of a sprint, with the agency racing to file charges before the end of its fiscal year. Sometimes, there would be 5 or 6 enforcement actions on the same day! But not this year. While the SEC has put out 19 press releases this month, almost all of them have been about rule changes. I counted only a single enforcement action, which seems almost unbelievable! Compare that to last year, when there were 51 releases and 41 of those were enforcement-related.

This didn’t happen during the first Trump Administration under SEC Chair Jay Clayton. In September 2018, roughly two-thirds of the SEC’s releases were enforcement related.

It looks like the enforcement hiatus isn’t just a September phenomenon either. On LinkedIn, William Floyd pointed out that the SEC issued only one Accounting and Auditing Enforcement Release in the last 99 days – and that release involved the reinstatement of a previously barred person.

The Division of Enforcement’s inactivity on the settlement front may have something to do with the fact that a new Director was named just a little more than a month ago and may just be getting her feet on the ground.  However, Enforcement was one of the areas that was particularly hard hit by the SEC’s staff reductions earlier this year, so resource constraints also may be a factor.

– John Jenkins