Who Does The SEC Name Most Often In Enforcement Releases Alleging Fraud?

Let’s take a minute to look at the financial fraud forest, and not just the individual trees. And let’s do that with the help of the Deloitte Forensic Center, which just released its third annual study of SEC Accounting and Auditing Enforcement Releases (“AAERs”). The particular question the study helps us explore is: who does the SEC name most often in enforcement releases alleging fraud?

The answer, according to Deloitte, is that corporate financial executives, such as chief financial officers (“CFOs”), chief accounting officers (“CAOs”) and controllers, collectively represented 44 percent of the individuals alleged in 2008 by the SEC to have committed financial statement fraud. Chief executive officers represented 24 percent of executives cited. Directors and general counsel were each identified as subjects of four percent of the AAERs.
 
In 2008 technology, media and telecommunications (30 percent) and consumer business (29 percent) had the greatest proportion of financial statement fraud schemes alleged by the SEC, followed by financial services (18 percent) and life sciences and health care (12 percent). Given the increased regulatory attention being given to the financial services and life science and health care industries, they are likely to rise to the top in next year's report.