SEC Settlements Are Projected to Reach Three-Year High in 2008, According to NERA Economic Consulting
10 November 2008
New York/10 November 2008 -- Securities and Exchange Commission (SEC) enforcement action settlements are projected to reach a three-year high in 2008, continuing a dynamic period of SEC enforcement since the enactment of Sarbanes-Oxley (SOX) in 2002, according to a new study released today by NERA Economic Consulting.
In performing the study, NERA reviewed every SEC litigation release and administrative proceeding document published from July 31, 2002 through September 30, 2008. The study, which can be viewed at www.SecuritiesLitigationTrends.com, was authored by NERA Senior Vice President Dr. Elaine Buckberg, Consultant Jan Larsen, and Dr. Baruch Lev, NERA Special Consultant and Philip Bardes Professor of Accounting and Finance at the Stern School of Business and Director of the Vincent C. Ross Institute of Accounting Research at New York University.
The NERA study, "SEC Settlements: A New Era Post-SOX," projects that the SEC is on pace to reach 739 settlements by year-end 2008. This marks the second straight year of increased settlement activity, with 702 settlements in 2007 and 663 in 2006.
Since the passage of SOX, the SEC has imposed unprecedented monetary penalties on a range of defendants. Prior to SOX, the largest penalty imposed in an SEC enforcement action against a publicly-traded company for financial fraud was a $10 million penalty against Xerox in April 2002. By contrast, according to NERA's research, since SOX the SEC has imposed penalties of $10 million or more against 115 parties, including 14 that were penalized at least $100 million.
In conjunction with the release of "SEC Settlements: A New Era Post-SOX," NERA is launching www.SecuritiesLitigationTrends.com, a website that features additional statistics and analysis, as well as a searchable database of documents relating to SEC settlements.
"NERA has been analyzing trends in securities litigation for more than 15 years," says Dr. Vinita Juneja, Senior Vice President and Chair of NERA's Global Securities and Finance Practice. "This new website provides researchers with the latest SEC settlement data and will offer easy, centralized access to future NERA reports and analyses of SEC settlements and shareholder class action trends."
Other findings of "SEC Settlements: A New Era Post-SOX" include:
About NERA
NERA Economic Consulting (www.nera.com) is an international firm of economists who understand how markets work. We provide economic analysis and advice to corporations, governments, law firms, regulatory agencies, trade associations, and international agencies. Our global team of more than 600 professionals operates in over 20 offices across North America, Europe, and Asia Pacific.
NERA provides practical economic advice related to highly complex business and legal issues arising from competition, regulation, public policy, strategy, finance, and litigation. Founded in 1961 as National Economic Research Associates, our more than 45 years of experience creating strategies, studies, reports, expert testimony, and policy recommendations reflects our specialization in industrial and financial economics. Because of our commitment to deliver unbiased findings, we are widely recognized for our independence. Our clients come to us expecting integrity and the unvarnished truth.
