Securities and Exchange Commission Chair Gary Gensler spoke about the commission’s enforcement actions at a recent gathering of securities attorneys, according to a Think Advisor report.
Addressing the Securities Enforcement Forum in Washington, Gensler provided insights about the SEC’s approach to enforcing compliance and penalizing misconduct.
He began by noting that in fiscal year 2023, the commission filed more than 780 actions, including more than 500 standalone cases. It obtained judgments and orders totaling $5 billion, leading to $930 million distributed to harmed investors. He added that the SEC uses all of the tools at its disposal to bring accountability, including bars, penalties, injunctions, undertakings, and litigating where appropriate.
Gensler also said that the SEC looks at what he called “high-impact cases” as part of its mission to protect investors. “When you’re a victim of fraud, misconduct, and abuse, the highest-impact case is the one that affects you—whether you lost $20,000 due to affinity fraud or your life savings in a crypto-related scam,” he said, adding that “All cases are important, and that’s why we work quickly to seek penalties and prophylactic relief to keep bad actors out of the markets. It’s important to us that you in the audience work with your clients to create a culture of proactive compliance.”
Gensler went on to emphasize the importance of compliance with record-keeping obligations, saying that failures of compliance with these obligations, including those involving off-channel communications, pose a threat to market integrity. He said the SEC has uncovered widespread use of personal devices and non-official channels to discuss business, with financial firms failing to maintain or preserve those off-channel communications.
Gensler pointed out that an ongoing sweep for potential violations since December 2021 has prompted the SEC to bring cases against 40 firms, require significant undertakings, and order more than $1.5 billion in penalties.
“Finally, trust in the markets depends on gatekeepers like auditors, lawyers, underwriters, and others—gatekeepers like you,” Gensler told the audience. “When those in positions of trust abuse that trust, we will not hesitate to hold them to account.”
The attorneys at Hyman Cotter PC 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 Hyman Cotter PC at 312-291-4600 or through our online contact form.
