In its annual report on its enforcement actions, the Securities and Exchange Commission disclosed that it obtained orders for $8.2 billion in financial remedies in fiscal year 2024, the highest amount in SEC history.
The results, detailed by AdvisorHub, showed that the SEC’s actions resulted in a combination of penalties and reimbursement to investors that included 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 SEC also announced that it filed 583 total enforcement actions for the year, 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 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.”
During the year, the SEC also continued its investigations on the use of off-channel communications such as WhatsApp to conduct official business. The commission said these actions are 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.
“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.”
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.
