The Securities and Exchange Commission (SEC), Division of Enforcement, has published its annual activity report for the fiscal year 2022. The Division of Enforcement is the largest section of the SEC and leverages the bulk of the agency’s budget.
During the SEC’s fiscal year of 2022, the Commission filed 760 enforcement actions.
According to the SEC, enforcement actions grew by 6.5% in 2022 versus the same period year prior.
SEC actions which include civil penalties, interest, and disgorgement, totaled $6.44 billion in 2022, up from the 2021 amount of $3.85 billion. This year represents the largest amount in history.
Gurbir S. Grewal, Director of the Division of Enforcement, commented on the report:
“As reflected in these results, the Enforcement Division is working with a sense of urgency to protect investors, hold wrongdoers accountable and deter future misconduct in our financial markets,. 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. 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.”
The report highlights headline enforcement actions revealed in the past year.
In regards to crypto, the SEC said that it remains focused on the emerging sector of finance, mentioning the following cases:
- Charges against BlockFi Lending LLC for failing to register the offers and sales of its retail crypto lending product, and, in a first-of-its-kind action against crypto lending platforms, for violating the registration requirements of the Investment Company Act of 1940.
- Charges against 11 individuals for their alleged roles creating and promoting Forsage, a fraudulent crypto pyramid and Ponzi scheme.
- Insider trading charges against Ishan Wahi and his associates, alleging that Wahi obtained material non-public information in his former role as a product manager at a crypto asset trading platform and tipped his associates ahead of multiple announcements regarding crypto asset securities that would be made available for trading on the platform, in advance of which his associates traded.
Earlier in the year, the SEC renamed the Cyber Unit to the Crypto Assets and Cyber Unit to better reflect its focus. At the same time, the SEC nearly doubled the unit’s staff.
As markets grow and numbers get bigger, it would be surprising if any of the top-line values ever go down.
The entire report is available here.