• The number of actions filed by the SEC against public companies and subsidiaries climbed again in FY 2023 to 91 actions, a 34% increase over the prior fiscal year. These actions accounted for 18% of the 501 total standalone enforcement actions filed in FY 2023.
• FY 2023 had the highest level of public company and subsidiary actions since FY 2019 and the third-highest annual total in the Securities Enforcement Empirical Database (SEED).
• The FY 2023 total was buoyed by a near record-setting number of public company and subsidiary actions filed in a single month.
• While an end-of-year uptick in activity is typical, the SEC filed 31 actions in September 2023 alone (34% of the FY 2023 total), tied for the highest of any month in SEED.
• Multiple SEC sweeps contributed to the September 2023 surge, including sweeps related to off-channel communication recordkeeping failures and failures to timely report insiders’ transactions and holdings.
• In a May 2022 decision, a Fifth Circuit panel ruled that the SEC’s use of an administrative proceeding, as opposed to filing a civil action, was unconstitutional. The U.S. Supreme Court is scheduled to review that decision at the end of November 2023.
• The percentage of public company and subsidiary actions brought as administrative proceedings slightly increased, to 92% in FY 2023. This was the highest percentage since FY 2019, and the third highest of any fiscal year in SEED.

The views expressed herein are solely those of the authors and do not necessarily represent the views of Cornerstone Research.