The SEC's September Spike: Regulatory Inconsistency with the Fiscal Year

Abstract

We examine how Securities and Exchange Commission (SEC) enforcement varies at fiscal year-end. Using a sample of over 12,000 SEC enforcement actions, we find that the number of case filings in September, the final month of the SEC's fiscal year, is approximately double the average of other months. We find several differences in the characteristics of cases filed in September, which suggest changes in enforcement behavior at fiscal year-end. First, staff use their discretion over the timing and venue of cases by accelerating case filings and filing more cases in the SEC's administrative court. Second, staff prioritize cases that require fewer resources and involve less severe allegations. Finally, September cases are more likely to be filed as settled charges and have more lenient settlement terms. Overall, our findings suggest regulatory inconsistency within the SEC's fiscal year.