SEC Enforcement: Focus On Corporate Disclosure

Amidst the flurry of SEC enforcement cases settled at the end of the SEC's fiscal year, three cases brought against companies with household names serve as a reminder that disclosure – whether of financial information or non-financial key performance indicators (KPIs) – matters. Moreover, a significant decline in a company's stock price is not a prerequisite for bringing a case.

BMW

In Bayerische Motoren Werke Aktiengesellschaft (BMW),¹ the SEC charged that BMW improperly increased reported retail sales and created a misleading impression of its sales performance in the U.S. market. BMW allegedly increased retail sales volume (a non-financial KPI) by including vehicles that it offered to its independent dealers as demonstrators or service loaners without regard to dealer need for such vehicles. This practice, the SEC alleged, made these figures misleading.