SEC Reports Enforcement Results in FY 2023
Commentary by Steven Lofchie
The SEC reported a three percent increase in total enforcement actions year over year. The agency said that the aggregated total in penalties and disgorgement ordered during fiscal year 2023 - $4.949 billion - was the second highest amount in SEC history, after the record-setting financial remedies ordered in fiscal year 2022.
In the Report, Enforcement Results for Fiscal year 2023, the SEC said that it filed 784 enforcement actions and obtained orders of $3.369 billion in disgorgement and prejudgment interest and $1.580 billion in civil penalties. The SEC said that in 2023, 133 individuals were barred from serving as officers and directors of public companies, the highest number in over a decade. Further, the SEC highlighted that $930 million was distributed to harmed investors, surpassing the previous year. In addition, the SEC reported that its Whistleblower Program distributed approximately $600 million, the highest amount of annual awards in one year.
Commentary
It is not obvious that a record amount of fines should be considered an achievement. To take one example, many of the fines the SEC imposed on recordkeeping failures this year seemed utterly disproportionate to the violations of law (a sentiment shared by SEC Commissioner Uyeda). Likewise, while the SEC may boast of the number of enforcement actions it brought against crypto firms this year, these actions have not brought the SEC any closer to developing a workable regulatory scheme applicable to crypto assets.