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SEC Coronavirus (COVID-19) Response

March 16, 2020

This page is no longer being updated.

The U.S. Securities and Exchange Commission’s efforts are centered, first and foremost, on the health and safety of our employees and all Americans. We also are focused on, among other things:

  • maintaining the continuity of Commission operations;
  • monitoring market functions and system risks;
  • providing prompt, targeted regulatory relief and guidance to issuers, investment advisers and other registrants impacted by COVID-19 to facilitate continuing operations, including in connection with the execution of their business continuity plans (BCPs); and
  • maintaining our enforcement and investor protection efforts, particularly with regard to the protection of our critical market systems and our most vulnerable investors.

We continue to work in close coordination with other financial regulators and governmental authorities in the United States and globally.

Below is a summary of operational initiatives, market-focused actions, guidance and targeted assistance and relief, investor protection efforts and other work of the agency in response to the effects of COVID-19. It is not an exhaustive list. Rather, it provides background and more specific context as to how the SEC is continuing to work with investors and other market participants as it executes its mission during this period of collective, national challenge.

Agency Operations: Transition to Telework and Continuity of Operations

The agency has now transitioned to a full telework posture with limited exceptions. A majority of SEC staff began teleworking Tuesday, March 10, 2020. The agency has remained fully operational during this transition, which is expected to last at least through June 6, 2022.

In the weeks prior to March 9, 2020, staff prepared for telework readiness, including conducting network capacity tests, and encouraging all employees to test their remote connectivity. We have also made preparations for remote open and closed Commission meetings if needed. Our experience since the week of March 9, 2020 provides us confidence that the agency will continue to be able to maintain operations in a full telework posture. As with any large-scale operational shift, we expect adjustments in certain functions, including with respect to information technology, may be necessary or advisable. We encourage market participants to continue to engage with us, and we will provide operational updates as necessary.

Several Divisions and Offices have released statements to inform market participants and others about their operating status and how best to engage with staff during this time. These include:

Market Monitoring and Engagement with Market Participants

In early February, we began assembling a cross-divisional working group to prepare for the possible adverse effects of COVID-19. An initial focus of these efforts was on monitoring the real and potential effects of COVID-19 on public companies, including with respect to potential reporting challenges and the importance of prompt, public disclosures by issuers concerning the effects and risks of COVID-19 on their businesses. Staff across divisions and offices have also expanded their ongoing outreach efforts with clearing agencies, exchanges, issuers, broker-dealers, investment companies, public accounting firms, investor representatives, credit rating agencies, fund sponsors, investment advisers and other market participants, as well as other domestic and foreign authorities. Key areas of ongoing focus and monitoring include:

  • Trading, Markets and Securities Infrastructure: Monitoring the functioning, integrity and resiliency of securities markets with a focus on operations, systems integrity and BCPs of U.S. securities clearinghouses, exchanges, other market utilities and key market participants. This involves monitoring and direct communications with these organizations (and other regulators) regarding market conditions, operational challenges, and other issues.
  • Large Financial Firm Monitoring: Monitoring and communicating with the largest U.S. broker-dealers to keep abreast of their activities and operations, including BCP matters and capital and liquidity. This includes gathering insights from these firms concerning industry trends and dynamics relating to the impact of COVID-19 on operations (at both a firm and a system level) and continued coordination with FINRA and the MSRB on observations and identification of material risks.
  • Retail Investors and Asset Management: Monitoring and outreach to the asset management industry (including mutual funds, money market funds, exchange traded funds (ETFs), private funds and investment advisers), particularly funds and advisers with material exposures in markets and asset classes that have been most affected by recent events. On April 2, the Investment Advisory Committee held a special meeting to focus on market and investment-related issues facing our retail investors.
  • Issuers, Corporate Disclosures and Accounting Issues: Monitoring and providing guidance with respect to corporate filings and disclosures (e.g., reporting earnings and financial results, changes in trends and outlook, the addition or modification of risk factors and discussion of supply chain and distribution matters) of U.S. issuers, as well as foreign companies that are listed in the United States, including engaging with issuers and other market participants that may need assistance or conditional relief in complying with their reporting obligations. Providing guidance to municipal market participants on the continuing disclosure obligations of municipal issuers and other obligated persons. We also have ongoing contact with several public accounting firms and their affiliates concerning their global operations, as well as industry and general trends and dynamics.
  • Securities Market Macro Trends, Dynamics and Potential Impacts: Monitoring and analyzing real and potential effects of COVID-19 on the functioning of U.S. and global securities markets. Recognizing that global markets are interconnected, this includes assessing potential impacts and spillover effects on industry and company operations and actions taken by governmental authorities and private market participants. This also includes communicating with the largest nationally recognized statistical rating organizations (NRSROs) to keep abreast of how they are considering the impacts of COVID-19 on their credit ratings and operations. As examples, in addition to market price movements and credit ratings, we are monitoring capital flows, funding requirements and the availability of credit and capital.
  • Ongoing Coordination with U.S. and Foreign Financial Regulatory Community: Engaging in regular communication, coordination and information sharing concerning risks, trends and impacts with the Department of the Treasury, National Economic Council, Federal Reserve Board, Federal Reserve Bank of New York, FDIC, OCC and CFTC, as well as authorities in Asia and Europe, including through participation in the Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO). Remaining in close contact with SROs such as exchanges, FINRA, and the MSRB. Coordinating with Congress on operations, market conditions and Commission actions and authorities, among other things.
  • Small Businesses and Investors in Small Business: Engaging in outreach with the small business community to address capital needs in light of business closures, workforce challenges, and declining revenue resulting from the effects of COVID-19. This includes the Office of the Advocate for Small Business Capital Formation hosting a series of virtual events with thought leaders across the small business ecosystem and proactively soliciting feedback on potential solutions. On April 2, the Small Business Capital Formation Advisory Committee held a special meeting to identify the most critical challenges small businesses face accessing capital.

On October 5, 2020, the SEC published a staff report titled U.S. Credit Markets: Interconnectedness and the Effects of the COVID-19 Economic Shock, which focuses on the origination, distribution and secondary market flow of credit across U.S. credit markets. The staff report also addresses how the related interconnections in our credit markets operated as the effects of the COVID-19 pandemic took hold.

Guidance and Targeted Regulatory Assistance and Relief

The Commission and staff are working to promptly provide guidance to market participants and targeted regulatory assistance and relief where necessary or appropriate. Below is a chronological list of certain of the more significant actions we have taken to date:

April 2021

December 2020

August 2020

June 2020

May 2020

April 2020

March 2020

February 2020

  • In February, it became apparent that the effects of COVID-19 could impact the ability of certain companies (particularly those with operations in China) to meet their reporting obligations. In connection with the PCAOB, we issued a Joint Statement: Effects of the Coronavirus on Financial Reporting (2/19/2020) that
    • Urged issuers to work with their audit committees and auditors to ensure that their financial reporting, auditing and review processes meet the applicable requirements in light of their obligations and the unforeseen circumstances.

    • Emphasized the need to consider potential disclosure of subsequent events in the notes to the financial statements in accordance with guidance included in Accounting Standards Codification 855, Subsequent Events.

    • Articulated the Commission’s general policy to grant appropriate relief from filing deadlines in situations where, in light of circumstances beyond the control of the issuer, filings cannot be completed on time with the appropriate level of review and attention.

January 2020

  • Statement from Chairman Clayton: Impact of the Coronavirus (1/30/2020)
    • Reminded issuers that the effects of COVID-19 and their response could, depending on a number of factors, be material to an investment decision; and directed staff to monitor issuer disclosures and provide guidance and assistance to issuers and other market participants.

The Commission and staff stand ready to continue to assist and, where necessary or appropriate, provide relief to market participants who are facing operational or reporting hardships relating to the effects of COVID-19.

Enforcement, Examinations and Investor Education

Like the rest of the agency, the Division of Enforcement and the Division of Examinations continue to execute on their mission of protecting investors and remain fully operational. The agency is actively monitoring our markets for frauds, illicit schemes and other misconduct affecting U.S. investors relating to COVID-19—and as circumstances warrant, will issue trading suspensions and use enforcement tools as appropriate.

Enforcement has dedicated significant resources to quickly responding to COVID-related matters. The Commission has suspended trading in issuers where there are issues regarding the adequacy and accuracy of the information in the marketplace in connection with COVID-19. Over the last few months, the SEC has suspended trading in the securities of dozens of issuers. The Commission has also brought a number of enforcement actions against issuers and individuals alleging fraud based on COVID-19 related claims.

Recent enforcement actions in connection with COVID-19 include:

  • SEC v. Aron Govil (7/19/21) – Settled action charging CEO of entity that supposedly developed mobile phone applications with, among other things, making material misrepresentations to investors regarding the company’s products, including allegedly falsely stating the company was developing an app to detect COVID-19.  

  • SEC v. Parallax Health Sciences, Inc. et al (7/7/2021) – Charges against public company, its CEO, and another senior executive for making misleading statements about its efforts to fight COVID-19

  • SEC v. Arrayit Corporation and Rene Schena (2/11/2021) - Biotechnology company and its CEO charged in connection with alleged false and misleading statements to investors about the company’s development of a COVID-19 test.

  • SEC v. Berman, et al. (12/17/2020) - Biotechnology company and its CEO charged with making false and misleading claims in numerous press releases that the company had developed a working, break-through technology that could accurately detect Covid-19 through a quick blood test.

  • In the Matter of The Cheesecake Factory Inc. (12/4/2020) - Charges settled against a restaurant company for making misleading disclosures about the impact of the COVID-19 pandemic on its business operations and financial condition.

  • SEC v. Schena (9/25/20) - President and Chief Science Officer of biotechnology company charged with making allegedly false and misleading statements concerning development of a COVID-19 blood test.

  • SEC v. Gomes, et al. (6/9/2020) – Emergency action against five individuals and six offshore entities for an alleged fraudulent scheme that generated more than $25 million from illegal sales of multiple microcap companies’ stock, including four companies that were the subject of recent SEC trading suspension orders.

  • SEC v. Nielson (6/9/2020) – Penny stock trader charged with conducting an alleged fraudulent pump-and-dump scheme in the stock of biotechnology company Arrayit Corporation by making hundreds of misleading statements in an online investment forum, including an alleged false assertion that the company had developed an “approved” COVID-19 blood test.

  • SEC v. Applied Bioscience (5/14/220) – Company charged with alleged false claims that it had begun offering and shipping supposed finger-prick COVID-19 tests.

  • SEC v. Turbo Global et al. (5/14/2020) – Company and its CEO charged with alleged false and misleading press releases about a purported “multi-national public-private-partnership” to sell thermal scanning equipment to detect individuals with fevers.

  • SEC v. Praxsyn Corporation et al. (4/28/2020) – Company and its CEO charged with alleged false claims the company was able to acquire and supply large quantities of N95 or similar masks to protect wearers from the COVID-19 virus.

Recent trading suspensions issued in connection with COVID-19 are listed below. Learn more information on trading suspensions.

Those interested can keep track of enforcement actions at SEC.gov.

On March 23, 2020, the Co-Directors of Enforcement released a statement highlighting market participants’ obligations with respect to material non-public information, including importance of maintaining controls and procedures to keep material nonpublic information confidential unless and until it is appropriately disclosed. The statement emphasizes the need for market participants to be mindful of the prohibitions on illegal securities trading, and to follow related controls and procedures, during times such as these where material nonpublic information may be more prevalent and arise in less common contexts. The statement also discusses our commitment to Main Street investors and our focus on those who would seek to prey on them in uncertain times.

On March 19, 2020 the Commission issued an order in pending Administrative Proceedings to encourage parties to file and serve documents electronically.

The Division of Examinations remains fully operational nationwide and, with adjustments to take into account health and safety measures, business continuity plans, firm-specific operational matters and other factors, continues to execute on its investor protection mission. More specifically, in light of health and safety concerns and other circumstances, the Division of Examinations has moved to conducting examinations off-site through correspondence, unless it is absolutely necessary to be on-site. The Division of Examinations is working with registrants to address the timing of its requests, availability of registrant personnel, and other matters to minimize disruption. the Division of Examinations will work with registrants to ensure that its work can be conducted in a manner consistent with maintaining normal operations, and importantly, necessary or appropriate health and safety measures.

Learn more about the Division of Examinations statement on its operations and examinations.

The Office of Investor Education and Advocacy continues its work to educate investors while the staff adheres to guidance from our nation’s public health officials. In April, the Office issued an investor alert outlining the types of frauds Main Street investors should be especially wary of during this time. The Office also issued an alert in February to educate investors, “Look Out for Coronavirus-Related Investment Scams.”

Through this period of collective, national challenge, we have remained fully operational and committed to our tripartite mission to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation. While the agency is engaging on numerous COVID-19 initiatives as noted above, we also continue our regular agency operations. For example, we have continued to advance rulemaking initiatives, conduct risk-based inspections, bring enforcement actions, and review and comment on issuer and fund filings.

Our staff has been intently focused on continuing to display the level of professionalism and dedication on which our investors and markets have come to rely. We recognize the importance of our mission to America’s investors and our markets and believe it is a privilege to serve.

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