SEC Enforcement Division’s Report on Priorities and FY 2017 Results Make Limited MicroCap Mentions
Earlier this month, the SEC Enforcement Division issued a report highlighting its priorities for the coming year as well as a review of enforcement actions that took place during FY 2017.
In the report, Co-Directors Stephanie Avakian and Steven Peikin stated their overall enforcement approach: “Vigorous enforcement of the federal securities laws is critical to combat wrongdoing, compensate harmed investors, and maintain confidence in the integrity and fairness of our markets.”
They also stated five core principles that will guide their enforcement decision-making:
1. focus on the Main Street investor;
2. focus on individual accountability;
3. keep pace with technological change;
4. impose sanctions that most effectively further enforcement goals; and
5. constantly assess the allocation of resources.
The 21 page report made limited mention of small public companies. The report included the word “microcap” three times and “penny stocks” twice.
These mentions were primarily related to a continuing effort to protect retail investors from wrongdoing in the microcap market and a nearly 100 microcap public companies that were deregistered in FY 2017 to combat potential market manipulation and microcap fraud threats to investors.
The report also highlighted some of their microcap enforcement actions in FY 2017 including;
Long Island-based cold calling scams that used high-pressure sales tactics and lies about penny stocks
Twenty-seven individuals and entities behind various alleged stock promotion schemes that left investors with the impression they were reading independent, unbiased analyses
Read the entire report HERE.