SEC enforcement actions getting up close and personal

• Published in: The journal of investment compliance 2016-05, Vol.17 (1), p.131-132
• Main Authors: Kaplan, Matthew E, Paley, Alan H, Tuttle, Jonathan R
• Format: Article
• Language: English
• ISSN: 1528-5812; 1758-7476
• DOI: 10.1108/JOIC-02-2016-0008

Purpose To alert public company management and directors to several recent SEC enforcement actions involving executives and other senior personnel arising out of securities law violations. Design/methodology/approach Reviews a series of enforcement actions against four chief executive officers, four chief financial officers, an audit committee chair, and one outside auditor (BDO USA LLC) and five of its partners arising out of securities law violations by four different corporations (MusclePharm Corporation, Bankrate, Inc., KIT Digital, Inc. and General Employment Enterprises, Inc.). Each of the actions involved financial reporting and disclosure violations. Also highlights the need for directors and senior management to maintain a sharp focus on their company’s controls and disclosure practices. Findings The SEC’S actions may portend renewed determination by the agency to hold executives and directors, as well as outside professionals, accountable for securities fraud and disclosure violations committed by corporations. Originality/value Practical guidance from experienced securities lawyers.