SEC Division of Enforcement Publishes Annual Report for Fiscal Year 2019

SEC Division of Enforcement Publishes Annual Report for Fiscal Year 2019

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On November 6, 2019, the SEC’s Division of Enforcement issued its annual report for the 2019 fiscal year, which ended in September.

In summary, the SEC brought a mix of 862 enforcement actions, including 526 standalone actions. These actions addressed a broad range of significant issues, including issuer disclosure/accounting violations; auditor misconduct; investment advisory issues; securities offerings; market manipulation; insider trading; and broker-dealer misconduct. Through these actions, the SEC obtained judgments and orders totaling more than $4.3 billion in disgorgement and penalties. Importantly, the SEC also returned roughly $1.2 billion to harmed investors as a result of enforcement actions. Despite a 35-day government shutdown, the Commission’s numbers depict a relatively active enforcement environment, bringing 191 actions against investment advisers and investment companies, 108 involving securities offers, and 38 against broker-dealers.

However, these numbers may be a bit misleading considering the high concentration of actions – nearly one-fifth of the total count – involving the SEC’s share-class initiative, which is reflective of the Commission’s push for enhanced retail investor protection. Backing out the 95 self-reported share class settlements, standalone enforcement actions were down more than 12 percent from the prior 2018 fiscal year. This is consistent with what we at Greyline have seen in the last 12 months: more efficient, focused examinations; a departure from the “broken windows” audit approach; a downtick in enforcement escalation; and a notable emphasis on investor protection and disclosure.

View the press release here: https://www.sec.gov/news/press-release/2019-233

View the full 2019 Annual Report here: https://www.sec.gov/files/enforcement-annual-report-2019.pdf

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Darren Mooney

Partner and Co-Head of Business Development

Darren Mooney is a Partner and the Co-Head of Business Development at Greyline. Before joining Greyline, Darren served as deputy chief compliance officer of Partner Fund Management where he held primary responsibility for the compliance program of the second-largest hedge fund in the Bay Area. Prior to that, Darren spent five years providing compliance consulting services at Cordium and then ACA Compliance Group, where he led the company’s San Francisco office and west coast operations. In addition to providing ongoing consulting services to a variety of investment managers, including hedge fund, private equity, venture capital, real estate, quantitative and other wealth managers, Darren also regularly guided clients through the SEC registration process, implemented tailored compliance programs, supported clients’ live SEC exams, and served as an SEC-mandated independent compliance consultant following an SEC enforcement action. Darren’s other experience includes serving as deputy chief compliance officer and associate counsel at F-Squared Investments where he directly supported the compliance program during the investigation and subsequent enforcement regarding historical advertising practices. Darren has a B.S. in Economics from the University of Delaware and a J.D. from Suffolk University Law School. He is a member of the Massachusetts bar.

Annie Kong

Partner and Head of Venture Capital
Annie Kong is a Partner and Head of the Venture Capital Division at Greyline. She provides ongoing compliance consulting to investment advisers and manages client relationships. Prior to joining Greyline, Annie was part of compliance and operations at a long-only manager-of-managers that advised pension fund clients. While there, she conducted compliance and operational due diligence on SEC-registered investment advisers on the platform. She also oversaw and counseled on various legal matters across the firm. Annie has a B.A. in Economics from the University of California, San Diego, and a J.D. from the University of San Diego School of Law. She is an active member of the State Bar of California.
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