SEC Financial Remedies Reach $8.2B in FY 2024 – Insights
The Securities and Exchange Commission (SEC) recently disclosed that in fiscal year 2024, they handled a total of 583 enforcement actions, resulting in $8.2 billion in financial remedies, which is the highest amount in SEC history.
While it might sound like a lot, the SEC noted that their enforcement activity actually declined by 26% compared to the previous year. Out of those cases, 431 were standalone actions, which is 14% less than the year before. Additionally, the SEC also pursued 93 “follow-on” administrative proceedings and took action in 59 cases against issuers who were not meeting filing requirements.
The $8.2 billion in financial remedies breaks down into $6.1 billion in disgorgement and prejudgment interest, with another $2.1 billion in civil penalties. A significant portion of this sum came from judgments against Terraform Labs and Do Kwon, who were ordered to pay $4.5 billion after being found guilty of fraudulent activities involving crypto assets.
SEC Chair Gary Gensler emphasized the importance of the Enforcement Division’s work in upholding market integrity and holding wrongdoers accountable. The division remains committed to ensuring the well-being of both investors and issuers.
In addressing issues of noncompliance, the SEC pointed to initiatives that tackled problems like off-channel communications and adherence to the Marketing Rule. The Commission enforced recordkeeping obligations resulting in over $600 million in penalties and dealt with cases of misleading advertising and hypothetical performance.
Furthermore, the Enforcement Division’s efforts also included investigations into financial wrongdoing, such as the case against Morgan Stanley for fraudulent activities related to the disclosure of confidential information about stock sales, resulting in a significant sum paid in disgorgement and penalties.
Looking ahead, the SEC highlighted the growing risks posed by emerging technologies, cybersecurity threats, and the misuse of social media by market participants. These developments will continue to shape the SEC’s priorities in the coming years as they strive to protect investors and maintain market integrity.
