SEC ramps up enforcement activity

Of those, 501 were stand-alone actions, up 8% from the previous year; 162 cases sought market bans against individuals due to criminal convictions or other actions; and 121 proceedings involved issuers with delinquent regulatory filings.

“The stand-alone enforcement actions spanned the securities industry, from billion-dollar frauds to emerging investor threats involving crypto asset securities and cybersecurity, and charged violations by diverse market participants, from public companies and investment firms to gatekeepers and social media influencers,” the regulator said in a release detailing its activity.

During the year, the SEC also obtained orders for US$4.95 billion in sanctions, including US$3.37 billion in disgorgement and US$1.58 billion in penalties.

“Both the disgorgement and civil penalties ordered were the second highest amounts on record,” the SEC said.

Alongside the monetary sanctions, the SEC also distributed US$930 million to harmed investors, and secured orders imposing director and officer bans against 133 people, it reported.

The rise in enforcement activity came amid a surge in whistleblower tips, with the regulator receiving more than 18,000 tips during the year — a 50% increase from the previous year.

The SEC also paid out almost US$600 million in rewards to whistleblowers in fiscal 2023, including a record-setting US$279 million payout to one tipster.

“It is no coincidence that as the SEC issues more and more whistleblower awards it also receives more and more whistleblower tips,” said whistleblower attorney Stephen Kohn of Kohn, Kohn & Colapinto, in a release.

“These awards incentivize insiders to come forward and report misconduct, bolstering the commission’s enforcement efforts and in turn protecting the American public from fraud,” he said.