A Reuters article published on May 26, 2020 reports that the SEC has experienced an uptick in complaints amid the COVID-19 pandemic. According to the article, the SEC received about 4,000 complaints from mid-March through mid-May – a 35% increase from the previous year. With an abundance of tips at its disposal, the SEC is eager to investigate and prosecute COVID-19 related misconduct.
The article discusses how the COVID-19 pandemic has incited a wave of misconduct, ranging from loan and healthcare fraud to the production of counterfeit and substandard medical supplies, across a wide range of industries. The article quotes an SEC spokeswoman as stating: “Unfortunately, fraudsters often seek to exploit difficult situations like the ongoing pandemic for their own gain. The SEC frequently relies on the tips that we receive from the public.”
According to the article, the SEC has already begun cracking down on COVID-19 misconduct. For example, the SEC created a task force specifically designed to monitor the market and detect potential abuses. With the help of that group, the SEC recently charged two companies for allegedly publishing false and misleading information about its COVID-19 testing products. The article suggests that these charges will be the first of many COVID-19 related enforcement actions. The SEC’s Co-Head of Enforcement, Steven Peikin, is quoted as stating: “We expect to see the SEC bring more actions as we continue to investigate suspected COVID-19 related scams.”
Notably, the Reuters article comes on the heels of our recent prediction that employers are likely to face a deluge of whistleblower claims under various laws and legal theories in the wake of the COVID-19 pandemic. We will be monitoring these whistleblower cases closely and continue to report on key future developments.
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