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Study Says SEC Pursues Individuals In Overwhelming Majority Of Actions

Publication Date: 
September 05, 2013
Source: 
Securities Law Daily - BNA
Author: 
Yin Wilczek

Professor Michael Klausner spoke to Yin Wilczek of Securities Law Daily - BNA about the study he authored with Jason Hegland, project manager at Stanford Securities Litigation Analytics, that examined SEC enforcement actions filed from 2000 to the present.

Contrary to what some critics suggest, the Securities and Exchange Commission names individual defendants in the overwhelming majority of its enforcement actions, a recent Stanford Law School study says.

The study, posted Sept. 3 to the Harvard Law School Forum on Corporate Governance and Financial Regulation, found that only 7 percent of SEC cases did not name an individual defendant. It also found that in SEC actions involving at least one fraud charge, 96 percent named individual defendants.

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The study was authored by Stanford law professor Michael Klausner and Jason Hegland, project manager at Stanford Securities Litigation Analytics. It examined SEC enforcement actions filed from 2000 to the present.

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Klausner told Bloomberg BNA he “actually did not know what the data would show” when he began the study. The study, he said, is part of broader academic research he is conducting into SEC enforcement policy as viewed through its actions.

Klausner and Hegland are part of Stanford Securities Litigation Analytics, which recently completed and is maintaining a database of SEC enforcement practices. Klausner said SSLA is talking to law firms about buying or licensing the data. There also is the possibility that in the future, some of the information could be made available to the public for free.

“I'm very interested in working with the SEC” on the database, Klausner continued. “I think it could be a mutually beneficial arrangement,” he said. “Not only can I provide them with the data, they also can make their information more automatically available to me.”