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SEC announces 9% increase in enforcement actions for fiscal year 2022

On Behalf of | Nov 29, 2022 | Securities and Compliance

The Securities and Exchange Commission has issued a report on its enforcement results for the fiscal year 2022. In a news release, the SEC said it had filed a total of 760 enforcement actions for the year, a 9 percent increase from fiscal year 2021.

The commission said it had recovered $6.4 billion in penalties and disgorgement on behalf of the investing public, the most on record in SEC history and up from over $3.8 billion in the previous year. The civil penalties ordered, amounting to nearly $4.2 billion, were also the highest on record.

Of the actions taken, 462 were new, or “stand alone” enforcement actions, an increase of 6.5 percent over last year. They ranged from first of their kind actions to cases involving traditional securities law violations. There were also 129 actions taken against issuers who were allegedly delinquent in making required filings with the SEC; and 169 “follow-on” administrative proceedings that sought to bar or suspend individuals from certain functions in the securities markets based on criminal convictions, civil injunctions, or other orders.

The commission said it worked with a sense of urgency throughout the year to deter misconduct in the financial markets and hold those who have committed violations accountable.

“A centerpiece of those efforts is ensuring that we are using every tool in our toolkit, including penalties that have a deterrent effect and are viewed as more than the cost of doing business,” said Gurbir S. Grewal, Director of the Division of Enforcement..“While we set a Commission record this past fiscal year for total money ordered at $6.4 billion, including a record $4.2 billion in penalties, we don’t expect to break these records and set new ones each year because we expect behaviors to change. We expect compliance.”

One of the actions highlighted by the commission was its order against 16 broker-dealers and one investment advisor for widespread recordkeeping violations.

The firms involved admitted to longstanding failures in maintaining and preserving electronic communications and agreed to pay combined penalties of over $1.1 billion. The SEC said this case exemplified its emphasis on robust enforcement by imposing penalties designed to deter future violations and establish accountability from major institutions.

The SEC also noted that in a number of actions it recalibrated penalties for certain violations as a means of deterring future misconduct and enhancing public accountability.

In addition, the SEC’s Office of the Whistleblower issued approximately $229 million in 103 awards for fiscal year 2022, making it the SEC’s second highest year in terms of dollar amounts and number of awards.

The attorneys at Lewitas Hyman include former senior attorneys at the SEC whose legal experience and industry knowledge make them uniquely qualified to provide counsel on securities regulatory, compliance and enforcement matters. Our attorneys fully understand the regulatory scrutiny financial professionals and their firms face from the various regulators that oversee the financial services industry. If your firm is facing an investigation from a regulatory agency, please contact Lewitas Hyman at (888) 655-6002 or through our online contact form.