How the Securities and Exchange Commission Fights Fraud, Protecting Retail Investors and Markets
“Serving and protecting Main Street investors is my main priority at the SEC.”
— Chairman Jay Clayton
The dedicated staff of the SEC works every day to protect Main Street Investors and U.S. markets from financial fraud and abuse, frequently in coordination with law enforcement partners at the Department Of Justice and other regulators. Read more about our efforts in this important area below:
Retail Strategy Task Force
Last September, the SEC’s Enforcement Division formed a new Retail Strategy Task Force, concentrating resources and expertise from across the Commission to develop targeted initiatives to identify and address misconduct that most affects retail investors.
“The Task Force is going to be strategic in looking for widespread abuses that affect retail investors, and in thinking about how we approach these investigations and potential cases.”–Stephanie Avakian, Co-Director, Division of Enforcement, October 26, 2017
FINANCIAL PLANNING: SEC task force to crack down on abuse of retail investors
Emergency Actions
The SEC is committed to taking swift action to stop harm to investors and return money to the victims of fraud and misconduct whenever possible. During Chairman Clayton’s tenure at the SEC, the Enforcement Division has obtained over 20 temporary restraining orders and over 30 asset freezes related to threats to retail investors.
FORBES: Court Halts Alleged Fraudulent $21 Million ICO At SEC's Request
Details of this case are available here.
CNBC: SEC halts one of the largest 'ICOs' ever as it wades deeper into the murky world of cryptocurrency offerings
Details of this case are available here.
SALI / Investor Education
In May, the SEC launched an online search feature that gives investors a new tool to research the person trying to sell them investments called the SEC Action Lookup for Individuals – or SALI. SALI complements existing investor-protection tools available on SEC.gov by allowing investors to look up if individuals have had judgments or orders entered against them in an SEC enforcement action, whether or not they are registered with the SEC.
The SEC also maintains a website at http://investor.gov, where Main Street investors can find information about the basics of investing, planning for retirement, researching investment professionals and opportunities, and avoiding the red flags of fraud, among other information and tools. As part of its investor education efforts, the SEC staff recently set up a fake ICO website, http://www.howeycoins.com, in very little time to alert investors to some of the classic warning signs of fraud in the digital asset space.
BLOOMBERG LAW: Meet ‘SALI,’ SEC’s New Tool for Finding Dirt on Advisers
NATIONAL LAW REVIEW: SALI to the Rescue Finds Parties Subject to SEC Enforcement Actions
INVESTMENT NEWS: Beyond BrokerCheck: SEC adds online adviser search tool
Addressing Cyber-Related Threats
Last year, the Enforcement Division created a new Cyber Unit to target cyber-related misconduct and emerging threats. The Cyber Unit focuses on, among other things, market manipulation schemes involving the web, cyber intrusions into retail brokerage accounts, and violations involving distributed ledger technology, including Initial Coin Offerings (ICOs).
“Cyber-related threats and misconduct are among the greatest risks facing investors and the securities industry. The Cyber Unit will enhance our ability to detect and investigate cyber threats through increasing expertise in an area of critical national importance.” - Stephanie Avakian, Co-Director of the SEC’s Enforcement Division, September 25, 2017
WALL STREET JOURNAL: Has the Cryptocoin Market Met Its Match in the SEC?
Last Reviewed or Updated: July 11, 2018