A Recap of Fiscal Year 2023 Enforcement Actions
The Securities and Exchange Commission (SEC) has continued its enforcement actions, announcing a total of 784 enforcement actions during fiscal year 2023. Here are the securities litigation enforcement highlights from the SEC for the past year.
Diverse Enforcement Landscape
Stand-Alone Actions Surge
A notable aspect of the SEC’s enforcement efforts is the significant uptick in stand-alone actions. A stand-alone action means that the SEC is taking regulatory or enforcement measures on its own, without being part of a joint effort with other regulatory bodies. These actions can include investigations, civil enforcement actions, administrative proceedings, or other regulatory measures against individuals, companies, or entities that are believed to have violated securities laws or regulations. With 501 original enforcement actions, representing an 8 percent increase from the preceding fiscal year, the SEC demonstrated its resolve to address a wide spectrum of violations across the securities industry. From billion-dollar frauds to emerging threats involving crypto asset securities and cybersecurity, the SEC’s reach spans the entire market landscape.
Addressing Delinquency: Actions Against Issuers
The SEC filed 121 actions against issuers allegedly delinquent in meeting required filings, reaffirming its commitment to maintaining transparency and accountability. These actions serve as a deterrent, reinforcing the importance of compliance with regulatory obligations for all market participants.
Upholding Public Trust
Enforcement Across Market Participants
The SEC’s enforcement actions were not confined to specific sectors; rather, they targeted diverse market participants. Public companies, investment firms, gatekeepers, and even social media influencers faced charges for various violations. This comprehensive approach ensures that wrongdoers are held accountable, regardless of their position within the industry.
Mitigating Oversight Risks
Acknowledging the significance of robust oversight in the securities industry, the SEC took actions to protect whistleblowers and enforce recordkeeping requirements. By addressing conduct that undermines industry oversight, the SEC reaffirms its commitment to maintaining the highest standards of governance.
Record-Breaking Financial Remedies
In fiscal year 2023, the SEC secured orders for financial remedies totaling $4.949 billion, the second-highest amount in its history. This impressive figure includes $3.369 billion in disgorgement and prejudgment interest, alongside $1.580 billion in civil penalties. The substantial financial remedies obtained underscore the SEC’s determination to hold wrongdoers accountable for their actions.
Director and Officer Bars Reach a Decadal High
The SEC obtained orders barring 133 individuals from serving as officers and directors of public companies, marking the highest number of such bars in a decade. This signals a proactive stance in ensuring that individuals responsible for wrongdoing face significant consequences, reinforcing the integrity of corporate leadership.
Whistleblower Program Success
Record-Breaking Whistleblower Awards
Fiscal year 2023 proved to be a milestone for the SEC’s Whistleblower Program. The Commission issued whistleblower awards totaling nearly $600 million, the highest amount ever awarded in a single year. This includes a record-breaking $279 million awarded to a single whistleblower. The overwhelming response, with over 18,000 whistleblower tips, reflects the growing confidence in the program as a crucial tool in unveiling securities violations.
In conclusion, the SEC’s achievements in fiscal year 2023 underscore its commitment to investor protection, market integrity, and financial accountability. As the SEC continues to adapt to emerging challenges, its enforcement actions send a clear message: violations will not go unnoticed, and wrongdoers will be held accountable, reinforcing the SEC’s role as a vigilant guardian of the securities markets.
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Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.