Two-and-a-half years ago, Securities and Exchange Commission Enforcement Director Robert Khuzami called a press conference to announce the agency’s Cooperation Initiative, calling the new program “a potential game changer.” The SEC was adopting new tools to deal with companies that came forward with evidence of fraud or other wrongdoing in their ranks. Following the lead of the Department of Justice, the SEC could offer companies non-prosecution agreements or deferred prosecution agreements, instead of just the threat of civil actions.

But since that program was announced in January 2010, the SEC has entered into just three NPAs and one DPA, according to this mid-year report by Gibson, Dunn & Crutcher. And of those four agreements, two were with government-controlled entities Fannie Mae and Freddie Mac. Meanwhile, the DOJ is on pace to file a record number of DPA/NPA agreements this year, with 21 inked in less than seven months. The Gibson Dunn report (which focuses on the DOJ’s activity) called the SEC’s numbers “somewhat surprising given the rising number of enforcement actions in recent years.”

The SEC defended its program in a statement to the Litigation Daily. Spokesman John Nester stressed that the agency has attracted a large number of individuals who are currently cooperating. “Established only two years ago, the SEC’s Cooperation Program is already paying substantial dividends,” he wrote. “In addition to DPAs and NPAs, the most utilized cooperation tool are cooperation agreements. Under the program, we’ve entered into 42 cooperation agreements with individuals who are cooperating in a variety of investigations covering almost every program area (i.e. insider trading, financial fraud/issuer reporting, FCPA, Investment adviser matters, municipal securities, market manipulation, and offering frauds/Ponzi schemes).”

Gibson Dunn partner F. Joseph Warin, one of the authors of the firm’s report, told us that he doesn’t sense that the low number of NPAs and DPAs is driven by a policy shift. Instead, Warin suggested that the SEC still hasn’t gotten the hang of using these agreements. “In many ways it’s unfamiliarity and not having the regularity of usage as it’s evolved at the Justice Department,” he said. Warin noted that the cooperation agreements took a while to catch on at the DOJ, too. “It’s an acculturation process,” he said. Still, he added, “One would have expected a little more momentum [at the SEC].”

Warin pointed out that companies faced with possible criminal charges have more incentive to agree to a DPA or NPA. In civil cases, it’s not so onerous to submit to litigation and then agree to a settlement in which no one admits wrongdoing, which is the norm. “The corporate bar is not as dynamically pushing for these agreements as it would on the criminal side,” he said. A civil NPA/DPA does, however, offer the advantage of not needing court approval or oversight–it’s simply a contract between the government and the corporation. (In other words, you don’t have to worry about your settlement landing before Manhattan U.S. District Judge Jed Rakoff or one of his admirers on the bench.)

The SEC notched its first NPA in December 2010, when it resolved allegations of accounting fraud with children’s clothing-maker Carter’s, Inc. In May 2010 the agency reached its first and only DPA so far–to resolve alleged violations of the Foreign Corrupt Practices Act by Luxembourg-based Tenaris S.A. (The company agreed to pay $5.4 million.) The Fannie Mae and Freddie Mac NPAs, which arose from the companies’ subprime activities, were announced in December 2011.

Nester confirmed that the SEC has reached only four agreements since the program started, but stressed that these aren’t the only relevant benchmarks. “DPAs and NPAs are not the only, or even necessarily the most effective, way to measure our Cooperation Initiative,” he said in his statement. “The bread and butter of the Cooperation Program is our ability to sign cooperators (individuals) up to formal cooperation agreements during the investigative phase. Regardless of whether or not an investigation ultimately resolves with a DPA or NPA, having the ability to sign up cooperators puts us in a position to get the kind of information that can break a case wide open. The Cooperation Program and formal cooperation agreements mean we can get better information earlier–helping us to stop fraud/wrongdoing as early in its life-cycle as possible, minimize investor losses, reduce the number of victims, and have a better chance of apprehending the wrongdoers.”

In March the SEC made its first announcement recognizing the cooperation of an individual under the initiative. In this press release, it stated that it had credited the substantial cooperation of a former senior executive of AXA Rosenberg by declining to take enforcement action against him. The investigation resulted in two settled enforcement actions last year against AXA Rosenberg and Barr Rosenberg.

Robert Giuffra Jr., who negotiated the DPA for Tenaris, echoed Warin’s comments that companies generally have more incentive to enter into DPAs and NPAs in criminal cases. “There generally are greater collateral consequences if a public company pleads guilty to a federal crime than if it enters into a civil SEC settlement,” said the Sullivan & Cromwell partner. Still, Giuffra added that it makes sense for the SEC to add another tool to its enforcement options with the DPAs and NPAs. “The SEC wants to provide incentives for companies to cooperate,” he said. “This gives the staff an additional carrot, short of taking no action.”