About the Division of Enforcement

Article

About the Division of Enforcement


The Division of Enforcement was created in August 1972 to consolidate enforcement activities that previously had been handled by the various operating divisions at the Commission's headquarters in Washington. The Commission's enforcement staff conducts investigations into possible violations of the federal securities laws, and prosecutes the Commission's civil suits in the federal courts as well as its administrative proceedings.

In civil suits, the Commission seeks injunctions, which are orders that prohibit future violations; a person who violates an injunction is subject to fines or imprisonment for contempt. In addition, the Commission often seeks civil money penalties and the disgorgement of illegal profits. The courts may also bar or suspend individuals from acting as corporate officers or directors. Releases describing recent litigation are posted on this site.

The Commission can bring a variety of administrative proceedings, which are heard by administrative law judges and the Commission itself. One type of proceeding, for a cease and desist order, may be instituted against any person who violates the federal securities laws. The Commission may order the respondent to disgorge ill-gotten funds in these proceedings. With respect to regulated entities (e.g., brokers, dealers and investment advisers) and their employees, the Commission may institute administrative proceedings to revoke or suspend registration, or to impose bars or suspensions from employment. In proceedings against regulated persons, the Commission is authorized to order the payment of civil penalties as well as disgorgement. Releases related to recently-instituted or settled administrative proceedings are posted on this site. In addition, this site contains Initial Decisions issued by Administrative Law Judges in contested cases, and Commission Opinions on appeal from enforcement actions and disciplinary proceedings by self-regulatory organizations (e.g., the National Association of Securities Dealers or the New York Stock Exchange).

The Commission's mandate is to protect investors. While in some cases, ill-gotten gains disgorged by defendants are returned to defrauded investors, the Commission is not authorized to act on behalf of individual investors. If you believe you have been defrauded, you should discuss the matter with a private attorney who is familiar with securities laws to ensure that your rights are protected under federal and state law.

Additional information about the work of the Division of Enforcement is contained in the Commission's Annual Report.

This site contains information about reporting fraud (fraudulent stock offerings, manipulations, or other conduct in violation of the securities laws). If you have a dispute with your broker, you may wish to consult the Web page for the Commission's Office of Investor Education and Advocacy, which has information on resolving such disputes (and avoiding them in future).