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SEC announces 3% increase in enforcement actions for fiscal year 2023

On Behalf of | Dec 1, 2023 | Securities and Compliance

The Securities and Exchange Commission has issued a summary of its enforcement actions for the fiscal year 2023, according to a Reuters report.

The commission announced that it filed 784 total enforcement actions during the year, a 3 percent increase over fiscal year 2022, including 501 original, or “stand-alone,” enforcement actions, an 8 percent increase over the prior fiscal year.

The SEC said it had filed 162 “follow-on” administrative proceedings seeking to bar or suspend individuals from certain functions in the securities markets based on criminal convictions, civil injunctions, or other orders and 121 actions against issuers who were allegedly delinquent in making required filings with the SEC.

The commission stressed the importance of individual accountability in its enforcement efforts, noting that about two thirds of the cases it brought during the year involved charges against one or more individuals.  Overall, the SEC obtained 133 orders barring individuals from serving as officers and directors of public companies, the highest number in a decade.

“The investing public benefits from the Division of Enforcement’s work as a cop on the beat,” said SEC Chair Gary Gensler. “Last fiscal year’s results demonstrate yet again the Division’s effectiveness—working alongside colleagues throughout the agency—in following the facts and the law wherever they lead to hold wrongdoers accountable.”

“Investor protection and enhancing public trust in our markets requires that we work with a sense of urgency, using all the tools in our toolkit. As today’s results make clear, that’s precisely what the Enforcement Division did in fiscal year 2023,” said Gurbir S. Grewal, Director of the Division of Enforcement.

The SEC obtained orders for $4.949 billion in financial remedies during the fiscal year, the second highest amount in SEC history.  The commission also distributed $930 million to harmed investors, marking the second consecutive year with more than $900 million in distributions.

Under its Whistleblower Program, the SEC issued whistleblower awards totaling nearly $600 million, the most ever awarded in one year, including a record-breaking $279 million awarded to one whistleblower.  The commission received a record 18,000 whistleblower tips in fiscal year 2023, a 50 percent jump over last year.  The SEC also received more than 40,000 tips, complaints, and referrals in total, a 13 percent increase over fiscal year 2022.

The commission imposed substantial financial penalties against major companies during the year for charges that addressed a wide range of securities law violations.  One example was the case in which 25 advisory firms, broker-dealers, and/or credit rating agencies including Wells Fargo, HSBC and Scotia Capital agreed to pay combined civil penalties totaling over $400 million to settle charges that they violated the recordkeeping requirements of the federal securities laws.

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.