The top cop at the Securities and Exchange Commission is taking a lesson from the NYPD.
Andrew Ceresney, the SEC's head of enforcement, on Wednesday charged 34 people and companies a total of $2.6 million for generally low-level violations — like failing to timely file stock ownership forms.
The actions are the latest in the agency's "broken windows" approach to policing the markets — that is, enforcing even the most basic regulations in hopes of keeping Wall Street from breaking the big ones.
The fines range from $25,000 to $150,000 — mere pennies compared to a summer filled with 10- and 11-figure settlements from the world's biggest banks for everything from securities fraud to aiding terrorist regimes.
The action is the largest for this kind of violation, Ceresney said in a media conference call.
"The message we're trying to send is that we can bring a bunch of actions in connection to violations we see," he said. "There needs to be increased focus on this area."
While the dragnet mostly ensnared executives and stockholders, it also brought in Brown Brothers Harriman, a research firm and custodian bank, for failing to disclose ownership in a stock on time.
Enforcement experts said that going after tardy filers is important for investors.
The form "lets the market know on a timely basis when insiders are trading their stock," said Jonathan Tuttle, a partner at Debevoise & Plimpton. "If you see a bunch of insiders trading their company's shares, it may raise questions as to why.
"The whole point of the 'broken windows' enforcement policy is to emphasize that securities laws are part of a comprehensive regulatory scheme and small violations of that regulatory scheme can have cascading effects," Tuttle added.
Another securities lawyer said that the enforcement might be a message to hedge funds looking to make predatory investments in companies without properly disclosing their holdings.
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