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SEC Reports Second-Biggest FY Fine Total Ever

Insurance Forums Staff

The Securities and Exchange Commission announced this week that it filed 784 total enforcement actions in fiscal year 2023, a 3% increase over fiscal year 2022, and obtained orders for $4.949 billion in financial remedies, the second highest amount in SEC history trailing only FY 2022.

“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.”

The total included 501 original, or “stand-alone,” enforcement actions, an 8% increase over the prior fiscal year. The SEC also 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 stand-alone enforcement actions spanned the securities industry, from billion-dollar frauds to emerging investor threats involving crypto asset securities and cybersecurity, and charged violations by diverse market participants, from public companies and investment firms to gatekeepers and social media influencers.

The SEC also brought numerous enforcement actions addressing conduct that undermines oversight of the securities industry, including actions to protect whistleblowers and actions to enforce recordkeeping requirements and other investor protection requirements applicable to industry participants, including broker-dealers and investment firms.

“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. “Whether it was by leveraging risk-based initiatives, seeking robust remedies, rewarding cooperation, protecting whistleblowers, or returning nearly a billion dollars to harmed investors, the Enforcement Division stood up for the investing public.”

Grewal added he was proud of the Division’s efforts, including those that are not directly reflected in the FY 2023 data like the many important investigations that may not result in enforcement actions or the thousand-plus ongoing investigations teams conduct each fiscal year that help protect investors, hold bad actors accountable, and promote public trust.

“The Division’s many accomplishments over the past fiscal year reflect the efforts of a staff that remains steadfastly focused on fulfilling the SEC’s investor protection mandate,” said Sanjay Wadhwa, Deputy Director of the Division of Enforcement. “The breadth and complexity of the issues addressed in our actions filed last year demonstrate the staff’s unwavering resolve, including when confronted by well-heeled adversaries, to doggedly pursue bad actors in every corner of the securities industry and hold them accountable for their transgressions.”

The financial remedies comprised $3.369 billion in disgorgement and prejudgment interest and $1.580 billion in civil penalties. Both the disgorgement and civil penalties ordered were the second highest amounts on record. The SEC also obtained orders barring 133 individuals from serving as officers and directors of public companies, the highest number of officer and director bars obtained in a decade.

In addition, the SEC distributed $930 million to harmed investors in fiscal year 2023, marking the second consecutive year with more than $900 million in distributions.

Fiscal year 2023 was a record-breaking year for the SEC’s 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 more than 18,000 whistleblower tips in fiscal year 2023, a record number and approximately 50% more than the then-record 12,300 whistleblower tips received in fiscal year 2022. The SEC received more than 40,000 tips, complaints, and referrals in total, a 13% increase over fiscal year 2022.

More details about FY 2023 enforcement actions is available at this SEC link.



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