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Cox Praises International Cooperation in SEC's Enforcement Efforts

Chairman Christopher Cox, in remarks at the closing of the SEC's International Enforcement Institute, noted the importance of working with international regulatory counterparts in the current credit crisis. Securities regulators from over 65 countries attended the institute to learn about issues such as conducting investigations, devising strategies for market surveillance and the inspection of broker-dealers. Maintaining market confidence is a global responsibility, according to the chairman, so securities regulators around the world must work together toward that objective, and particularly in the area of enforcement.

Mr. Cox reported that the SEC in the last year requested assistance from foreign regulators 556 times in connection with its investigations, many of which were linked to possible wrongdoing in the subprime markets. The SEC has 12 open subprime investigations underway with its foreign regulatory counterparts, he advised. Many of the cases are complex investigations that require access to each other's files, he explained. Some of the cases also include ongoing criminal investigations in the United States and abroad.

Chairman Cox said the SEC has received 454 requests from foreign regulators in the past year for assistance in enforcement matters. These cooperative international efforts have led to tangible and impressive results, he said. He reviewed recent cases involving the assistance of foreign regulators, including regulators in the United Kingdom, Switzerland and Andorra.

The chairman noted that studies have found a correlation between the level of securities law enforcement and the health of capital markets. The securities markets are deeper where there is a robust public enforcement of the securities laws, he said. He added that strengthening public enforcement has been found to assist in the quality of emerging markets.

In the last fiscal year, Chairman Cox reported that the SEC has brought a record number of enforcement actions against market manipulation, including a precedent-setting case against a Wall Street short seller for spreading false rumors. The SEC, for the last two years, has set a record for the highest number of corporate penalty cases in the agency's history. In recent months, the SEC has announced settlements in principle that will return over $50 billion to investors in auction rate securities. Those are by far the largest settlements in the SEC's history, he advised.

The SEC also brought the highest number of insider trading cases in the agency's history in 2008, many with the assistance of foreign regulators. The SEC brought a record-setting number of cases under the Foreign Corrupt Practices Act as well. Chairman Cox said that the participants in the institute highlight the cooperative spirit that helps to make the SEC's efforts successful.