SEC Announces Enforcement Results for Fiscal Year 2023
Last year we reported on and discussed the SEC's total enforcement action announcement for fiscal year 2022. Today we' ll examine the SEC's recent announcement of fiscal year 2023 enforcement results and discuss the data .
In 2022, the SEC filed 760 enforcement actions – a 9% increase from 2021. This year brought a total of 784 enforcement actions that amounted to another 3% increase from the year 2022. These actions also include over 500 original, or “stand-alone” as the SEC calls them, enforcement actions that showed another 8% increase over last year. Along with these primary enforcement actions, the SEC also filed 162 “follow-on” administrative proceedings with the goal of barring or suspending individuals from performing various functions in the securities market based on criminal convictions, civil injunctions, and more. These enforcement action results coincidentally fall after a year of many new rules, proposed rules, and various regulations from the SEC regarding investment advisers and those in the financial securities space.
As in previous years, these enforcement actions were widespread on a variety of topics and reasons. These actions spanned from excessively large corporate frauds to emerging investor threats involving cryptocurrencies and other complicated securities, as well as a variety of cybersecurity infractions. Speaking on this year's enforcement actions and results, SEC Director of the Division of Enforcement Gurbir S. Grewal said, “ Whether it was by leveraging risk-based initiatives, seeking robust remedies, rewarding cooperation, protecting whistleblowers, or returning nearly a billion dollars to harmed investors, the Enforcement Division stood up for the investing public … all of which help protect investors, hold bad actors accountable, and promote public trust. ”
Through these enforcement actions, the SEC obtained nearly $5 billion in financial remedies, with 2023 being the year with the second-highest amount in SEC history. These remedies consisted of $3.369 billion in disgorgement and prejudgment interest and $1.580 billion in civil penalties . The SEC has also barred 133 individuals from serving as officers and directors of public companies . This is the highest number of officer and director bars since at least 2003.
The SEC came close to a billion dollars in distributions this year with $930 million distributed to harmed investors throughout 2023. Following 2022, this is the second consecutive year with over $900 million in investor distributions. Along with harmed investor distributions, the SEC issued nearly $600 million in whistleblower awards, the highest ever awarded in one year. This number includes a record-breaking $279 million awarded to a single whistleblower. The SEC received over 50% more whistleblower tips this year than in 2022, totaling over 18,000 tips.
As we reach the end of 2023, our hindsight towards the year showcases an unprecedented number of enforcement actions, distributions, awards, and many new and proposed rules. The data shows the SEC plans to continue their run through the securities space with a fine-toothed comb, seeking out any potential infraction and remedying it most efficiently and robustly possible. We understand the bevy of new rules and regulations can be daunting and we encourage you to reach out to the FinTech Law team for any questions or assistance .