SEC sees 9 percent increase in enforcement actions in FY 2022; record $6.4B in violations

The Securities and Exchange Commission (SEC) filed 760 total enforcement actions in fiscal year 2022, a 9 percent increase over the previous fiscal year, the commission announced this week.

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Of this total, 462 were new, or “stand-alone,” enforcement actions, up 6.5 percent from the previous year. The stand-alone enforcement actions ran the gamut of conduct, from “first-of-their-kind” actions to cases charging traditional securities law violations.

Also, 129 were against issuers who were allegedly delinquent in making required filings with the SEC. In addition, 169 of the enforcement actions were “follow-on” administrative proceedings that sought to bar or suspend individuals from certain functions in the securities markets based on criminal convictions, civil injunctions, or other orders.

Overall, the total of money ordered in these SEC actions — including civil penalties, disgorgement, and pre-judgment interest — totaled $6.439 billion. This is the most on record in SEC history, up from $3.852 billion in fiscal year 2021.

Of the total money ordered, about $4.2 billion was in civil penalties — the highest on record, while $2.2 billion was in disgorgement, down 6 percent from fiscal year 2021. Further, fiscal year 2022 was the SEC’s second-highest year ever in whistleblower awards in terms of both the number of individuals awarded and the total dollar amounts awarded.

“I continue to be impressed with our Division of Enforcement. These numbers, though, tell only part of the story,” SEC Chair Gary Gensler said. “Enforcement results change from year to year. What stays the same is the staff’s commitment to follow the facts wherever they lead.”

Gurbir Grewal, director of the SEC’s Division of Enforcement, said the division works with a sense of urgency to protect investors, hold violators accountable, and deter future misconduct.

“A centerpiece of those efforts is ensuring that we are using every tool in our toolkit, including penalties that have a deterrent effect and are viewed as more than the cost of doing business. While we set a Commission record this past fiscal year for total money ordered at $6.4 billion, including a record $4.2 billion in penalties, we don’t expect to break these records and set new ones each year because we expect behaviors to change. We expect compliance,” Grewal said.

Sanjay Wadhwa, deputy director of the Division of Enforcement, said it was a team effort.

“From investigative attorneys and litigators to accountants, data scientists, investigators, and support staff, each member of Enforcement contributed to the many successes of the Division in the past fiscal year, and it is a great privilege to serve alongside them in protecting U.S. investors,” Wadhwa said.