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Key takeaways from the SEC’s 2023 enforcement results

27 Dec 2023

By Jennifer Dickinson, Senior Managing Director, U.S.

On November 14, the U.S. Securities and Exchange Commission (SEC) released the enforcement results for its fiscal year 2023, which ended September 30. In this article, we’ll take a look at some of the most noteworthy enforcement cases, highlighting what SEC-regulated firms can learn from these examples in order to stay compliant in 2024.

The headline numbers

In total throughout its 2023 fiscal year, the agency filed:

  • 784 total enforcement actions, representing a 3% increase vs fiscal year 2022
  • 501 original (or “stand-alone”) enforcement actions, an 8% increase
  • 162 “follow-on” administrative proceedings seeking to bar or suspend individuals based on criminal convictions, civil injunctions or other orders
  • 121 actions against issuers who were allegedly delinquent in making required filings with the SEC

Financial remedies in 2023 were the second highest amount in the SEC’s history, totaling $4.949 billion. Of this amount:

  • $3.369 billion consisted of disgorgement and prejudgment interest (second highest on record)
  • $1.580 billion in civil penalties (also second highest on record)

In addition, the SEC distributed $930 million to harmed investors in fiscal year 2023, marking the second consecutive year with more than $900 million in distributions.

Finally, 2023 was record year for the SEC’s whistleblower program. The SEC received more than 18,000 whistleblower tips, marking a sizeable 50% uptick from 2022. Awards totaled nearly $600 million, the most ever awarded in one year, with one award alone amounting to $279 million.

Notable 2023 enforcement cases

Several 2023 enforcement cases stand out as noteworthy, together highlighting a number of priority themes for the SEC that firms should take note of:

Off-channel communications

In May, August and September, the SEC announced settlements against multiple investment advisers and broker-dealers for widespread recordkeeping failures. The common thread of all these cases was the widespread use of electronic communications that were not being archived. In total, the 23 firms paid over $390 million in penalties.

Among the September cases, one stood out from the pack. One firm had voluntarily self-reported suspected violations to the SEC. As a result, its penalties were $2.5 million, substantially lower than the other firms charged in that case.

Marketing rule

The SEC charged nine investment advisers with violating its marketing rule, which took effect on November 4, 2022. Each of the charged firms advertised hypothetical performance to mass audiences on their websites without having the required policies and procedures. Altogether, the firms paid civil penalties of $850,000.


The SEC brought three cases against firms for violating the Dodd-Frank whistleblower protection rule. In the case against an investment adviser, the SEC alleged that an investment adviser’s employment agreements raised impediments to whistleblowing. The provisions in question prohibited the disclosure of confidential corporate information to third parties, without an exception for potential SEC whistleblowers. The firm also required departing employees to sign releases affirming that they had not filed any complaints with any government agency for the employees to receive deferred compensation. The firm paid a $10 million civil penalty, the largest penalty on record for a standalone violation of the rule.

Market abuse

The SEC brought cases alleging a variety of abusive trading practices, such as insider trading, front-running and market manipulation. For example:


The SEC charged  a broker-dealer for allegedly making materially false and misleading statements and omissions regarding information barriers to prevent the misuse of sensitive customer information. The litigation is pending.


The SEC charged an investment adviser for making materially misleading statements about its controls concerning ESG products. The firm’s marketing materials stated that it adhered to specific policies for integrating ESG considerations into its investments, but the SEC found that the firm failed to adopt and implement policies and procedures to ensure its statements about the ESG-integrated products were accurate. The firm agreed to pay a $19 million civil penalty to settle the charges.

In another case, the SEC brought similar charges against an investment adviser for policies and procedures failures involving two mutual funds and a separately managed account strategy marketed as ESG investments. To settle the charges, the firm agreed to pay a $4 million penalty.

Conflicts of interest and related disclosures

The SEC brought a number of cases against investment advisers relating to conflicts of interest and disclosure failure, including:

  • Charges against a private equity firm for failing to adequately disclose millions of dollars of real estate brokerage fees that were paid to an affiliate owned by the CEO. The firm paid a $6.5 million civil penalty and more than $14 million in disgorgement and prejudgment interest
  • Charges against an investment adviser involving a cash sweep program operated by its affiliated custodian and undisclosed arrangements with third-party custodians whereby the firm received of millions of dollars in revenue sharing payments. The firm agreed to pay a civil penalty of $9.5 million and disgorgement and prejudgment interest of more than $8.5 million
  • Charges against an investment adviser and its CEO for misleading the trustees of a fund they managed to obtain $20 million in rescue financing to avoid a possible bankruptcy. To settle the charges, the firm and its parent company were ordered to pay a $4 million civil penalty, and the CEO agreed to pay a $400,000 civil penalty and was barred from association with an investment adviser, among other remedial measures

With such serious financial and reputational penalties at stake, we encourage firms to refresh themselves on these and other relevant enforcement cases to ensure their compliance programs effectively address the SEC’s concerns.

At IQ-EQ, our compliance consultants have the experience to handle all U.S. regulatory requirements of the SEC and will work closely with you to keep your firm compliant in the face of new and evolving rules. Find out more about our U.S. compliance consulting services.

Working with IQ-EQ has been seamless – you and your team understand our business, advise us appropriately, and handle your side of our collective partnership so that we can focus on making good investment decisions. Evan Gibson SVP, Merchants Capital

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