As I wrote about here recently, SEC enforcement actions surge each September as the SEC tries to boost its stats for the fiscal year, which ends September 30. The WSJ had an interesting article last week that acknowledged this issue and digs another level down to ask whether the SEC is bringing record numbers of "deregistration" cases to provide filler on its numbers.

Although the SEC has not yet announced the final figure for its 2008 fiscal year, SEC Chairman Christopher Cox stated on Wednesday that this year was the enforcement division's second-best on record, which would put it somewhere between the 656 enforcement cases brought in fiscal 2007 and the record 679 actions in fiscal 2003 (see the chart in this post for statistics dating back to 2001).

In an article last week, the WSJ questioned whether the SEC is further gaming its enforcement numbers through a record number of "12(j)" actions to deregister shares in companies that lack current financial reports:

The SEC brought about 50 such cases in fiscal 2006, a level that appears to have doubled in fiscal 2008, which ended Sept. 30, accounting for roughly 15% of all cases.

Individuals familiar with the matter, who agreed to speak anonymously, said that in early 2008 the SEC's enforcement division was on track to bring an abysmally low number of cases for the year. One reason for the declining output was a rush to issue cases at the end of fiscal 2007, leaving little in the pipeline for fiscal 2008, according to these individuals.

Unlike more traditional and complex financial fraud or insider trading cases, the WSJ notes that deregistration actions provide "easy filler" and that the SEC is arguably using "accounting tricks" of its own by doing this.

SEC Director of Enforcement Linda Chatman Thomsen told the WSJ that counting enforcement actions is an "imperfect tool" and that the SEC provides the count because it is required to do so by Congress.