The Securities and Exchange Commission (SEC) recently announced that it filed 583 total enforcement actions in fiscal year 2024 while obtaining orders for $8.2 billion in financial remedies, the highest amount in SEC history.
The 583 enforcement actions are said to represent a significant 26 percent “decline in total enforcement actions compared to fiscal year 2023.”
And out those cases, the Commission said that it had filed 431 “stand-alone” actions, which was 14 percent less than in the prior fiscal year; 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, which was 43 percent less than the prior fiscal year; and 59 actions against issuers who were allegedly delinquent in making required filings with the SEC, which represented a decrease of 51 percent.”
The $8.2 billion in financial remedies consisted of “$6.1 billion in disgorgement and prejudgment interest, also the highest amount on record, and $2.1 billion in civil penalties, the second-highest amount on record.”
Approximately 56 percent of the $8.2 billion financial remedies ordered is attributable to a “monetary 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.”
SEC Chair Gary Gensler said that the Division of Enforcement is a steadfast cop on the beat, “following the facts and the law wherever they lead to hold wrongdoers accountable.”
Gensler added that as demonstrated by this year’s results, the Division helps promote the “integrity of their capital markets to benefit investors and issuers alike.”
Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement said that during 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,”
Wadhwa added that 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 their investigations, answering our call to foster a culture of compliance.”
What their numbers do not reflect, however, “are countless investigations that may not have resulted in an enforcement action for evidentiary or other reasons, or where they declined to pursue an enforcement action, but that shined a spotlight on potentially problematic conduct and caused responsible market participants to cease engaging in it. All of this adds up to protecting innumerable investors and promoting trust in our capital markets.”
Sam Waldon, Acting Deputy Director of the Division of Enforcement said that 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,”
Waldon added that they could not be more pleased with the dedicated and talented staff of the Division of Enforcement “who work tirelessly to hold wrongdoers accountable, promote compliance, and help promote investor trust in the markets.”
In addition, in fiscal year 2024, the SEC obtained orders barring “124 individuals from serving as officers and directors of public companies, the second-highest number of such bars obtained in a decade.”
In 2024, the SEC reports that it has distributed “$345 million to harmed investors, marking more than $2.7 billion returned to investors since the start of fiscal year 2021.”
The SEC also received 45,130 tips, complaints, and referrals in fiscal year 2024, the “most ever received in one year, including more than 24,000 whistleblower tips, more than 14,000 of which were submitted by two individuals.”
The SEC reportedly issued whistleblower awards “totaling $255 million.”