SEC Enforcement Actions Decline in Fiscal Year 2024, Financial Remedies Reach Record High
The Securities and Exchange Commission (SEC) faced 583 enforcement actions in Fiscal Year 2024, marking a decline from the previous year but obtained record-breaking orders for $8.2 billion in financial remedies. This total was the highest in the agency’s history.
Although the number of enforcement actions dropped by 26% compared to FY 2023, significant financial penalties were imposed. Of these actions, the SEC filed 431 “standalone” cases, 93 “follow-on” administrative proceedings, and 59 actions against issuers behind on their necessary filings.
Within the $8.2 billion financial total, $6.1 billion consisted of disgorgement and prejudgment interest, setting a record high, while $2.1 billion in civil penalties ranked as the second-highest in history.
A notable win for the SEC was the judgment following a jury trial against Terraform Labs and Do Kwon, which secured approximately 56% of the financial remedies ordered. This case exposed one of the most significant securities frauds in U.S. history.
SEC Chair Gary Gensler highlighted the integrity maintenance of capital markets, ensuring both investors and issuers benefit. The Enforcement Division took rigorous steps to enforce federal securities laws, leading to high-impact actions and substantial financial penalties.
Furthermore, the SEC barred 124 individuals from public company officer and director roles, the second-highest figure in the past decade. Over $345 million was distributed to affected investors in FY 2024, totaling over $2.7 billion since FY 2021 started.
Market participants, including public companies and broker-dealers, proactively self-reported violations or cooperated with investigations, displaying a constructive compliance culture. The SEC also protected whistleblowers by addressing Dodd-Frank violations, prohibiting market participants from hindering whistleblower contacts.
Compliance with federal securities laws, including timely disclosures of securities holdings and transactions, remains crucial for informed investment decisions. Charges were settled against entities and individuals who failed to report their holdings, reinforcing the importance of transparency in financial dealings.
The Enforcement Division secured substantial financial remedies in litigated and settled cases throughout FY 2024. Notably, Terraform Labs and Do Kwon were ordered to pay over $4.5 billion after being found liable for fraud in a jury verdict, marking the highest remedies post-trial.
In tackling major fraud schemes in the financial sector, the Enforcement Division maintained its focus on holding wrongdoers accountable. From Ponzi schemes to billion-dollar frauds, the SEC’s actions aim to protect investors and promote trust in capital markets, ensuring integrity and transparency prevail.
