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
Marketing rule
Whistleblowers
Market abuse
Cybersecurity
ESG
Conflicts of interest and related disclosures
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.