U.S. enforcers heavily targeting investment advisers

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More than a third of enforcement actions brought by the Securities and Exchange Commission in the latest fiscal year involved alleged misconduct by investment advisers or firms, many of which work with ordinary investors. Some of the advisers had failed to disclose conflicts of interest that could lead them to charge excessive fees or to misuse investors’ money. A report from the SEC, whose responsibilities include protecting investors, shows that 36% of 526 cases the agency brought in the year that ended Sept. 30 involved

investment advisers. That was up from 22% of all cases during the previous year. An additional 21% of the SEC’s enforcement actions in the latest year involved stock offerings. Among the rest, 17% centered on companies’ financial reporting and accounting. Overall, the SEC won $4.3 billion in penalties and restitution in the latest fiscal year, up from $3.9 billion during the previous year and the highest sum since 2002. The agency returned $1.2 billion to investors who were deemed to have been harmed, up from $794 million in the year before.

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