The last thirty days in September, the end of the US federal government’s fiscal year, is generally an important time to analyze enforcement activity by the US Securities and Exchange Commission (“SEC”) and the US Commodity Futures Trading Commission (“CFTC”).
Because all enforcement cases must be reviewed and approved by the SEC and CFTC Commissioners, the end of the fiscal year often poses a logjam in processing enforcement recommendations. As a result, enforcement staff and leaders at the SEC and the CFTC must prioritize enforcement recommendations that they want to have approved by the Commissioners before the end of the fiscal year. Thus, in our experience, enforcement cases filed at the end of the fiscal year (and for the SEC, particularly ones accompanied by a press release as opposed to a typical administrative or litigation release), are strong indicators of issues currently in the regulators’ crosshairs and set the tone for enforcement hotspots and priorities for the next fiscal year.
In this short video, Baker McKenzie Partner Peter Chan, a former SEC Assistant Director of Enforcement, provides his “inside baseball” insights regarding the importance of the timing of some of these enforcement actions.
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