The U.S. Securities and Exchange Commission (SEC) says it secured record monetary sanctions in enforcement actions in its latest fiscal year, despite reduced case volumes.
On Friday, the agency announced that its enforcement actions generated a total of US$8.2 billion in remedies in its latest fiscal year (period ended Sept. 30), including a record US$6.1 billion in disgorgement and pre-judgment interest, along with US$2.1 billion in penalties (the second-highest total on record).
However, more than half of the record total came in a single case — the SEC’s jury trial victory against Terraform Labs and Do Kwon, in a crypto fraud case which involved more than US$4.5 billion in disgorgement, prejudgment interest, and civil penalties.
Alongside the record remedies, the SEC reported that it distributed US$345 million to harmed investors and paid out US$225 million in whistleblower awards during the latest fiscal year.
It also obtained orders against 124 individuals, banning them from serving as officers and directors of public companies. This marked the second-highest total of these sorts of bans over the past 10 years, the agency said.
Yet, while the total financial remedies obtained by the SEC rose to record heights, the agency’s volume of enforcement cases declined in fiscal 2024. During the fiscal year, it filed a total of 583 enforcement actions, which was down by 26% from the previous year.
The regulator brought 431 ‘stand-alone’ enforcement actions during the year, down 14% from the previous year. The number of follow-on proceedings, where it sought to impose sanctions based on criminal convictions, civil injunctions or other orders was down 43% from the prior year. And actions against issuers for delinquent regulatory filings dropped 51%.
“What our numbers do not reflect … are countless investigations that may not have resulted in an enforcement action for evidentiary or other reasons, or where we 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,” said Sanjay Wadhwa, acting director of the SEC’s division of enforcement, in a release. “All of this adds up to protecting innumerable investors and promoting trust in our capital markets.
Wadhwa also noted that market participants, including public companies, major broker-dealers and advisory firms, “stepped up efforts to self-report, remediate, and meaningfully co-operate” with SEC investigations.
“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 SEC’s division of enforcement, in the release.