Throughout the week over at Securities Docket I highlight the most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation. Here is a digest of my picks for the week ending October 18, 2013.

The government shutdown in SEC filings

Michelle Leder, footnoted*It's now been two weeks since the government shutdown began. While the number of companies mentioning the crisis in Washington in their routine filings to the SEC can't quite be described as a thundering roar, we did count about 15 companies that have had something to say about the mess in Washington DC in their filings over the past two weeks.

As you might guess, many of the companies are dependent on decisions from the Food and Drug Administration. And many of these companies are so small that any type of delay seems like it could have some pretty serious consequences, though to be fair, anyone who invests in small biotech stocks probably has a pretty strong stomach to begin with. Still, as time has passed, we've started to see larger companies begin issuing warnings too.

SEC Enforcement: Is the Swagger Back?

Thomas O. Gorman, SEC ACTIONS

The swagger is back according to SEC enforcement officials. Presumably that comment is meant to say that an enforcement program which once was viewed as among the best in government has returned to that rarified echelon. To be sure there is a lot of positive buzz about the program. New Chair Mary Joe White has in recent weeks addressed enforcement priorities (here), market structure (here) and last week what might be called enforcement omnipresence. But the swagger? Consider Ms. White's most recent remarks at the Securities Enforcement Forum, Washington, D.C.

“Show Me the Money” or 14 Million Reasons to Upgrade Your Compliance Program

John J. Carney and Kendall E. Wangsgard, BakerHostetlerGiven the lottery-like nature of the $14 million dollar bounty, employers should expect more employees to disclose potential misconduct to the SEC rather than reporting internally. As the number and value of whistleblower awards increases, it further underscores the need for corporations to be as proactive as possible in ensuring that compliance programs and training are robust and up to date. Companies must also encourage employees to report misconduct internally by countering two of the forces likely to push employees towards external reporting — fear of retaliation if they report internally and a belief that internal reporting is ineffectual and unlikely to generate change. It is only through this type of robust compliance that companies can effectively ensure that would-be whistleblowers report internally rather than to the government.

Tone at the Top (of the SEC): Tough

David L. Caplan and Richard J. Sandler, The Harvard Law School Forum on Corporate Governance and Financial RegulationAs the fiscal year comes to a close—even while the Securities and Exchange Commission, amidst the government shutdown, continues to fund its operations through a carryover balance from FY 2013—it is a good time to review recent signs of SEC skepticism regarding financial statement reporting practices and the SEC's current focus on public company officers, directors, and auditors as targets of potential enforcement actions. Since Mary Jo White was confirmed as the new Chairman in April, and George Canellos and Andrew Ceresney were named Co-Directors of the Division of Enforcement later that month, a number of enforcement actions and SEC statements suggest a heightened vigilance, particularly with respect to potential corporate accounting failures.

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