The Securities and Exchange Commission has issued a summary of its enforcement actions that were conducted during the fiscal year 2024.
In a news release, the SEC announced that it filed 583 total enforcement actions for the year while obtaining orders for $8.2 billion in financial remedies, the highest amount in SEC history. The number of enforcement actions was down 26% from fiscal year 2023.
431 of the actions were “stand-alone” cases, a decline of 14% from the prior year. There were 93 “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. That was down 43 percent from 2023. There were 59 actions against issuers who were allegedly delinquent in making required filings with the SEC, a decrease of 51%.
The $8.2 billion in financial remedies consisted of a record $6.1 billion in disgorgement and prejudgment interest, and $2.1 billion in civil penalties, the second-highest amount on record. About 56% of the remedies were due to a judgment obtained following the SEC’s jury trial win against Terraform Labs and Do Kwon, who were charged with one of the largest securities frauds in U.S. history.
“The Division of Enforcement is a steadfast cop on the beat, following the facts and the law wherever they lead to hold wrongdoers accountable,” said SEC Chair Gary Gensler. “As demonstrated by this year’s results, the Division helps promote the integrity of our capital markets to benefit investors and issuers alike.”
“In fiscal year 2024, the Division continued to vigorously enforce the federal securities laws by recommending to the Commission high-impact enforcement actions addressing noncompliance throughout the securities industry and resulting in robust financial remedies,” said Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement. “At the same time, market participants across the spectrum – from public companies to major broker-dealers and advisory firms – stepped up efforts to self-report, remediate, and meaningfully cooperate with our investigations, answering our call to foster a culture of compliance.”
Wadhwa added there were many investigations that may not have resulted in enforcement actions but caused market participants to stop engaging in potential misconduct.
“The varied enforcement actions recommended by the Division in fiscal year 2024 demonstrate the Division keeping pace with emerging threats presented by misstatements regarding artificial intelligence, fraudsters using social media to perpetuate relationship scams, and more, while maintaining its focus on evergreen investor risks such as material misstatements, deficient internal controls, and major gatekeeper failures,” said Sam Waldon, Acting Deputy Director of the Division of Enforcement.
Other actions highlighted by the SEC for fiscal year 2024 included:
-Orders barring 124 individuals from serving as officers and directors of public companies.
-$345 million distributed by the SEC to harmed investors, marking over $2.7 billion returned to investors since the start of fiscal year 2021.
-45,130 tips, complaints, and referrals were received, the most ever in one year, including more than 24,000 whistleblower tips, more than 14,000 of which were submitted by two individuals. The SEC issued whistleblower awards totaling $255 million.
-Market participants including public companies, investment advisers, and broker-dealers self-reported or remediated securities law violations or otherwise cooperated meaningfully with the Division of Enforcement’s investigations, answering the Division’s call to practice a culture of proactive compliance. These involved a range of alleged violations, such as material misstatements, fraud, recordkeeping violations, and controls failures related to cybersecurity.
-Continuing initiative on off-channel communications to ensure that regulated entities, including broker-dealers, investment advisers, and credit ratings agencies, comply with the recordkeeping requirements of the federal securities laws. Recordkeeping cases were brought by the SEC resulting in more than $600 million in civil penalties against more than 70 firms.
-The Enforcement Division’s ongoing initiative investigating non-compliance with the Marketing Rule resulted in settled charges against more than a dozen investment advisers.
-The Division recommended, and the Commission authorized, a series of settled enforcement actions to address violations of the Dodd-Frank whistleblower protection rule, which prohibits market participants from taking any action to impede would-be whistleblowers from contacting the SEC.
-The SEC announced settled charges against more than two dozen entities and individuals for failures to timely report information about their holdings and transactions in public company stock or for contributing to filing failures by their officers and directors.
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