The Securities Enforcement Empirical Database (SEED) currently provides data for SEC actions initiated against public companies traded on major U.S. exchanges and their subsidiaries (public company–related defendants). We define public companies as companies with security prices that are tracked by the Center for Research in Security Prices. The number of new actions against public company–related defendants in the first half of FY 2017 was in line with the past two fiscal years, although the defendant mix returned to the pattern seen during FY 2010 through FY 2014.
SEED tracks the type of allegation the SEC makes in each enforcement proceeding. Issuer Reporting and Disclosure allegations make up the largest fraction of the SEC’s enforcement activity against public company–related defendants in most years, a trend that has continued in the first half of FY 2017. FCPA allegations made up the largest percentage in FY 2011 and Municipal Securities/Public Pensions allegations were the largest percentage in FY 2015.
From FY 2010 through the first half of FY 2017, the top ten monetary settlements imposed in public company–related actions totaled over $3.4 billion. Four of these occurred in administrative proceedings, while six were in civil actions. The largest monetary SEC settlement since FY 2010 was $550 million by a subsidiary of a public financial services company and the next largest monetary settlement was $525 million by a public oil and gas company in FY 2013.
The public company–related actions resolved in the first half of FY 2017 resulted in total monetary settlements of $783 million. FCPA violations accounted for over 40 percent of this total. The median monetary penalty for the first half of FY 2017 was $6.3 million, substantially higher than the median monetary penalties of $0.5 million and $3.1 million imposed by the SEC during FY 2015 and FY 2016, respectively.
Public company-related defendants cooperated in 63 percent of settlements with the SEC in the first half of FY 2017. The percentage of cooperating defendants in the first half of FY 2017 was the highest among FCPA actions, consistent with the SEC’s focus on incentivizing cooperation in FCPA violations.
SEED now tracks the Standard Industrial Classification (SIC) codes of public company defendants and the publicly traded parent companies of subsidiary defendants. Manufacturing was the most common industry in the first half of FY 2017 with 40 percent of public company–related defendants, up from only 17 percent in FY 2016.