Over at the Harvard Corporate Governance blog, Michael Klausner has some descriptive data on how often the SEC targets individual defendants in enforcement actions.
only 7 percent of cases involved no individual defendants. Focusing solely on cases involving at least one fraud count, only 4 percent of cases involved no individual defendants. In the remainder of cases, the SEC named either individual defendants only or it named both the corporation and individual defendants.... [T]he SEC names a wide range of individuals as defendants. It names CEOs in 56% of its cases, CFOs in 58% of cases, and lower level executives in 71% of cases. Regarding the scapegoat characterization, the SEC has targeted solely lower level executives in only 7% of its cases.
The charts alone are worth a look, so do check it out.
I'm not too surprised by this data, but it is nice to have it. There seems to be a feeling in the enforcement community that a fine paid by a corporation isn't much of a fine at all, and that individual sanctions must be included. The Klausner project certainly suggests that SEC practice is consistent with such a vision.
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