SEC's Fiscal Year 2023 Enforcement Results: A Comprehensive Overview

The Securities and Exchange Commission (SEC) has reported a robust enforcement performance for fiscal year 2023, filing a total of 784 enforcement actions, marking a 3% increase over the previous fiscal year. The enforcement actions comprised 501 original ("stand-alone") actions, representing an 8% rise from the previous fiscal year. The SEC also initiated 162 "follow-on" administrative proceedings and 121 actions against issuers allegedly delinquent in their filings.

Key Highlights:

1. Diverse Enforcement Actions

The enforcement actions covered a spectrum of the securities industry, addressing billion-dollar frauds, emerging threats related to crypto asset securities and cybersecurity, and violations by various market participants, from public companies and investment firms to gatekeepers and social media influencers.

2. Financial Remedies and Investor Compensation

In fiscal year 2023, the SEC obtained orders for nearly $5 billion in financial remedies, marking the second-highest amount in SEC history. This included $3.369 billion in disgorgement and prejudgment interest and $1.580 billion in civil penalties. Moreover, the SEC distributed $930 million to harmed investors, demonstrating the regulator's commitment to compensating those affected by securities law violations.

3. Whistleblower Program Success

The fiscal year witnessed record-breaking achievements in the SEC's Whistleblower Program, with awards totaling nearly $600 million, the highest in a single year. The SEC received over 18,000 whistleblower tips, a 50% increase from the previous fiscal year, underscoring the program's growing significance in identifying and addressing securities violations.

4. Crypto Asset Securities and Market Abuse

Fiscal year 2023 showcased the SEC's intensified focus on crypto asset securities, addressing alleged frauds, unregistered offerings, and actions against crypto intermediaries. The SEC took action against social media influencers, financial services professionals, and celebrities for unlawfully touting crypto asset securities.

5. ESG-Related Cases

Reflecting the increasing importance of Environmental, Social, and Governance (ESG) considerations, the SEC brought enforcement actions against firms for making misleading statements about their ESG products. Notable cases included charges against Deutsche Bank subsidiary and Goldman Sachs Asset Management.

6. Public Finance, Investment Professionals, and FCPA Enforcement

The SEC targeted fraud in the public finance sector, charging Exelon Corporation for a multi-year political corruption scheme. The regulator also took action against investment professionals, holding them accountable for nondisclosures and conflicts of interest. Additionally, the SEC remained committed to enforcing the Foreign Corrupt Practices Act (FCPA).

7. Litigation and Trial Success

While the majority of enforcement actions were settled, the SEC highlighted its commitment to litigation and trials, with over 40% of standalone matters filed as litigated actions. The Commission achieved significant victories in jury trials and motions, reinforcing its dedication to protecting investors and market integrity.

In summary, the SEC's fiscal year 2023 enforcement results reflect a proactive and multifaceted approach, addressing a wide array of securities law violations, protecting investors, and upholding the integrity of the markets. The record-breaking achievements in financial remedies, whistleblower awards, and the focus on emerging areas like crypto assets and ESG underscore the SEC's adaptability to evolving challenges in the financial landscape.

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