SEC Creates Task Forces to Detect Accounting and Microcap Fraud

The U.S. Securities and Exchange Commission has formed two enforcement task forces aimed at rooting out improper accounting and fraud at small companies, the agency said.

The SEC’s enforcement division also created a Center for Risk and Quantitative Analytics to identify risks and threats that could harm investors, the agency said in a statement today.

“By directing resources, skill and experience to high-impact areas, we will increase the potential for uncovering financial-statement and microcap fraud early and bring more cases aimed at deterring these types of unlawful activity,” co-director of enforcement Andrew Ceresney said in the statement.

The financial reporting task force will concentrate on publicly filed statements, issuer reporting and audit failures, the SEC said. The group will also focus on a review of financial restatements and revisions. The group will be led by David Woodcock, head of the SEC’s regional office in Fort Worth, Texas, and will work in consultation with the enforcement division’s chief accountant, according to the statement.

In fiscal 2012, the SEC brought the fewest number of accounting-fraud cases since at least 2003.

To contact the reporter on this story: Joshua Gallu in Washington at jgallu@bloomberg.net

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net

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