Who may be interested: Registered Investment Companies; Directors of Registered Investment Companies; and Investment Advisers
Quick Take: The SEC’s Division of Enforcement (Enforcement) released a report summarizing its enforcement actions in fiscal year 2023. The report shows a cumulative increase in the number of enforcement actions filed, individuals barred from performing specific roles in the securities markets, tips received, and whistleblowers paid as compared to the prior fiscal year.
Throughout the 2023 fiscal year (October 1, 2022 – September 30, 2023), Enforcement filed 784 enforcement actions, representing a 3% increase over the prior year. Further, the SEC assessed nearly $5 billion in financial remedies, including approximately $3.4 billion in disgorgement and prejudgment interest and $1.6 billion in civil penalties; returned $930 million to harmed investors; and issued orders barring 133 individuals from serving as officers and directors of public companies.
Of the 784 enforcement actions, 501 were original, or “stand-alone,” actions, in which the SEC handled administrative proceedings from start to finish. An additional 162 were “follow-on” actions intended to bar or suspend individual actors, and 121 were actions against issuers who were allegedly delinquent in making required filings with the SEC.
The whistleblower program also yielded significant numbers. During fiscal year 2023, the SEC paid whistleblowers approximately $600 million in awards, the highest number ever paid in a single year by the SEC. This included a record-breaking award of $279 million to one whistleblower. Whistleblowers also provided more than 18,000 tips, representing approximately a 50% increase from the 12,300 whistleblower tips received in 2022.
The release notes that the SEC also rewarded cooperation by entities that self-policed, self-reported or remediated potential securities law violations by resolving actions with lower, or no, civil penalties with respect to the reported conduct.
Consistent with the SEC’s 2023 and 2024 examination priorities, the Enforcement Division brought actions relating to the new marketing rule, off-channel communications, cybersecurity, crypto, environmental, social and governance issues, among others. The release highlighted and summarized some of these actions.
The SEC’s press release announcing its 2023 enforcement results can be found here.
