SEC Enforcement Actions Fall Significantly As Crypto and Text Message Cases Predominate

SEC Enforcement Actions Decline in FY 2024, Focusing on Crypto and Text Message Cases

The U.S. Securities and Exchange Commission’s (SEC) Division of Enforcement recently released its enforcement results for fiscal year 2024, showing a significant decrease in enforcement activity compared to the previous year. In FY 2024, the SEC brought 583 actions, a 26% drop from FY 2023. Despite this decline, the SEC reported a record-breaking $8.2 billion in disgorgement and penalties, with over half of that amount stemming from a case against a company currently in bankruptcy proceedings.

The SEC initiated 431 stand-alone actions in FY 2024, a 14% decrease from the prior year. This decline was driven by fewer securities offering cases and issuer reporting/audit and accounting cases. The SEC also saw a decrease in follow-on administrative actions and filing delinquency actions, down by 43% and 51%, respectively.

Cases reflecting outgoing Chair Gary Gensler’s priorities, such as record-keeping violations from text messaging and cryptocurrency enforcement, made up a majority of the monetary remedies in FY 2024. However, these types of actions are expected to decrease in future years with the change in administration.

Overall, enforcement actions by the SEC in FY 2024 focused on investment adviser and investment company matters, securities offering matters, and broker-dealer matters. The number of standalone cases dropped significantly due to decreases in securities offering cases, issuer reporting/audit and accounting cases, and FCPA cases. Only investment adviser/investment company cases and public finance abuse cases saw increases in FY 2024.

It will be interesting to see how enforcement actions evolve under the upcoming administration, with a new focus on different priorities in the years ahead.