Securities and Commodities Exchange Litigation Reaches All-Time High in September 2020
The latest available data from the federal courts show that during September 2020, the government reported 262 new securities and commodities exchange civil filings based upon the recorded nature of the suit. This is the highest number of such filings for a single month on record going back to at least October 2007. According to the case-by-case court records analyzed by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University, this number is twice that of the previous month when the number of civil filings of this type totaled 125 and 25 percent higher compared with those a year earlier in September 2019.
This brings the total of securities and commodities exchange civil filings to a record total of 1,850 for fiscal year 2020. This total is even higher than the years following the great recession in 2008-2009.
Suits in this category involve alleged violations of the Securities and Exchange Act (15 USC 78), securities fraud under 15 USC 77 and 12 USC 22, violations of commodities exchange regulations and other breaches of fiduciary duties. Three out of four suits (192) in September were brought by private parties rather than by federal agencies, while the remaining 70 were initiated by the federal government. Of the 70 suits filed by federal agencies during FY 2020, the Securities and Exchange Commission (SEC) brought 61, while the Commodity Futures Trading Commission (CFTC) filed 9. SEC suits were brought for allegations of such matters including insider trading, violations of the Foreign Corrupt Practices Act, market manipulations, as well as various violations of securities offerings[1].
The long-term trend in securities and commodities exchange civil filings going back to FY 2008 is shown in Figure 1. The vertical bars in Figure 1 represent the number of civil filings of this type recorded each fiscal year. Figure 2 shows the monthly trend in securities and commodities exchange civil filings going back five years to October 2015. The superimposed line on the bars plots the six-month moving average so that natural fluctuations are smoothed out.
October 2015 - September 2020 moving average.(Click for larger image)
Top Ranked Judicial Districts
Suits of this type tended to be concentrated in just a few federal judicial districts. Over four out of every ten securities and commodities exchange suits brought in FY 2020 were filed in just two districts. The Southern District of New York (Manhattan) had the largest number of filings with 514. This was followed by Delaware with 275 suits.
Four other districts had over 100 of these suits. These jurisdictions were the Northern District of California (San Francisco) with 151 suits, the Eastern District of New York (Brooklyn) with 125, the Central District of California (Los Angeles) with 104 suits and the District of New Jersey with 102. See Table 1. Districts not listed had no filings recorded in FY 2020.
| Federal Judicial District | Number | |
| Total Filings | Percent of All Filings | |
| All Districts | 1,850 | 100% |
| N. Y., S | 514 | 27.8% |
| Delaware | 275 | 14.9% |
| Cal, N | 151 | 8.2% |
| N. Y., E | 125 | 6.8% |
| Cal, C | 104 | 5.6% |
| N. J. | 102 | 5.5% |
| Fla, S | 52 | 2.8% |
| Ill, N | 49 | 2.6% |
| Mass | 38 | 2.1% |
| Cal, S | 29 | 1.6% |
| Texas, N | 27 | 1.5% |
| Colorado | 26 | 1.4% |
| Penn, E | 26 | 1.4% |
| Maryland | 24 | 1.3% |
| Fla, M | 22 | 1.2% |
| Texas, S | 20 | 1.1% |
| Ga, N | 17 | <1% |
| Conn | 16 | <1% |
| Mich, E | 15 | <1% |
| Nevada | 15 | <1% |
| Utah | 14 | <1% |
| Ohio, S | 13 | <1% |
| Texas, W | 11 | <1% |
| Oregon | 10 | <1% |
| Arizona | 9 | <1% |
| Minnesota | 9 | <1% |
| N Car, W | 8 | <1% |
| Ohio, N | 8 | <1% |
| Penn, W | 8 | <1% |
| Tenn, M | 8 | <1% |
| Virg, E | 8 | <1% |
| Cal, E | 6 | <1% |
| Kansas | 6 | <1% |
| Wash, W | 5 | <1% |
| Ala, N | 4 | <1% |
| D. C. | 4 | <1% |
| Idaho | 4 | <1% |
| Ken, E | 4 | <1% |
| La, M | 4 | <1% |
| Mo, W | 4 | <1% |
| Fla, N | 3 | <1% |
| La, W | 3 | <1% |
| Mo, E | 3 | <1% |
| Miss, S | 3 | <1% |
| N Mexico | 3 | <1% |
| Okla, W | 3 | <1% |
| Penn, M | 3 | <1% |
| S Car | 3 | <1% |
| Texas, E | 3 | <1% |
| Hawaii | 2 | <1% |
| Ind, S | 2 | <1% |
| N Car, M | 2 | <1% |
| Nebraska | 2 | <1% |
| N. Y., N | 2 | <1% |
| N. Y., W | 2 | <1% |
| Tenn, W | 2 | <1% |
| Wisc, E | 2 | <1% |
| Wisc, W | 2 | <1% |
| W Virg, N | 2 | <1% |
| Ala, S | 1 | <1% |
| Ark, E | 1 | <1% |
| Ga, M | 1 | <1% |
| Ga, S | 1 | <1% |
| Iowa, S | 1 | <1% |
| La, E | 1 | <1% |
| N Car, E | 1 | <1% |
| Tenn, E | 1 | <1% |
| Wash, E | 1 | <1% |
Footnotes
[1] The SEC's annual report for FY 2020 covers a wider scope of enforcement actions that extends beyond federal civil suits and provides further useful details on the parties involved and the nature of the violations that were alleged. Under this broader measure of enforcement actions, there were 715 enforcement actions in FY 2020, down from 862 such actions during FY 2019.