Securities & Exchange Commission

Although most people recognize the SEC as the entity that regulates the stock market, most may not realize that the SEC is a law enforcement agency.

The Enforcement Division assists the SEC in investigating and prosecuting securities law violations through civil actions in federal court and also works closely with law enforcement agencies in the U.S. and around the world to bring criminal cases when appropriate.

With a formal order of investigation, the Division’s staff may compel witnesses by subpoena to testify and produce books, records, and other relevant documents. Following an investigation, SEC staff present their findings to the Commission for its review. The Commission can authorize the staff to file a case in federal court or bring an administrative action before an administrative law judge. In many cases, the Commission and the party charged decide to settle a matter without trial.

Information regarding an SEC disciplinary matter is located on the SEC website, in either the Litigation Releases or the Accounting & Auditing Enforcement Releases. Links to this information are included in the Helpful Links section below. Information from both these sites is also compiled by NASBA and distributed to the boards through the Quarterly Enforcement Report.

To create the Quarterly Enforcement Report, NASBA compiles information from the SEC, IRS, PCAOB and AICPA websites, then cross-references the names of CPAs and CPA firms listed in the disciplinary matters against the Accountancy Licensee Database to help identify possible jurisdictions in which the CPA or firm might hold a license, and is then distributed to the Executive Directors by email. These Quarterly Enforcement Reports are also posted on the Quarterly Enforcement Reports page.

The Litigation Releases include discipline arising from civil lawsuits for actions not involving the direct practice of accountancy, such as a CPA disciplined for a felony conviction such as insider trading or embezzlement. The Accounting & Auditing Enforcement Releases include discipline related to financial reporting related enforcement actions concerning civil lawsuits brought by the SEC in federal court and settlements of administrative proceedings.

The letter will include contact information in order to help the boards gain more information, if needed. General information can be obtained by calling the SEC contact person identified on the letter. Additional information and copies of the SEC file documentation can be requested by submitting an Access Request form. A copy of the form is also provided in the Helpful Links below.

If your board has received a letter from the SEC, then your best option for gaining additional information is to reach out to the contact person identified within the letter. If you are following up on a matter that you have discovered either from the SEC website or the NASBA Quarterly Enforcement Report, you can contact Casey Kittredge Risso in the Office of the Chief Accountant at the SEC. Her contact information is provided below.