The SEC noted cooperation by 69% of public companies and subsidiaries that settled in FY 2023, the third highest of any fiscal year in the Securities Enforcement Empirical Database (SEED). Of the cooperating defendants that settled, 13% had no monetary settlements imposed.

Cooperation in Settlements

• Of the new actions filed against public companies and subsidiaries in FY 2023, more than two-thirds (69%) included at least one cooperating public company or subsidiary.
• Of the 70 cooperating defendants, 14 were charged as part of the SEC’s sweep for recordkeeping failures related to off-channel communications.
• Only 87% of cooperating defendants had monetary settlements imposed, as compared to 94% of the defendants without cooperation noted.
• The remaining 13% of cooperating defendants had no monetary settlements imposed, which is more than triple the average rate over FY 2014–FY 2022. The SEC stated that no civil penalties were levied directly as a result of defendant cooperation for five of these nine cooperating defendants.

FY 2023 average monetary settlement amounts in actions both with and without cooperating defendants were lower than the FY 2014–FY 2022 average.

• Fifteen of the cooperating defendants also had admissions of guilt, as compared to one of the defendants without cooperation noted.

SEC Sweeps and Initiatives

• Two SEC sweeps contributed a total of 16 new public company and subsidiary actions, representing 18% of the FY 2023 total:

• The SEC’s sweep of broker-dealers and other entities for recordkeeping failures continued into FY 2023, with 11 new actions filed.
• Five new actions were brought against public companies for insiders’ reporting failures, as part of an initiative focused on timely disclosure of insiders’ transactions and holdings.

• Public companies and subsidiaries were also charged as part of the following sweeps, initiatives, and focus areas in FY 2023: SPAC-related (eight actions); companies’ failures to disclose complete information on Form NT (three actions); Whistleblower Protection Rule initiative (three actions); crypto-related (two actions); cybersecurity (two actions); and ESG (two actions).