SEC Distributes $1 Billion to Harmed Investors in 2023

<p>The
Securities and Exchange Commission (SEC) has announced the completion of 784
enforcement actions in the fiscal year 2023 (FY23). Although this was only a
marginal 3% increase from the previous year, the financial watchdog obtained
orders for nearly $5 billion in remedies, with $1 billion distributed to harmed
investors.</p><p>SEC Reports Substantial
Enforcement Activity in FY23</p><p>According
to the SEC's <a href="https://www.sec.gov/news/press-release/2023-234" target="_blank" rel="nofollow">official statement</a>, 501 of 784 actions were original, stand-alone probes,
showing an 8% year-over-year increase. The SEC's oversight extended to 162
follow-on administrative proceedings aimed at barring or suspending individuals
based on prior convictions or injunctions and 121 actions against issuers for
delinquency in mandatory SEC filings.</p><p>The SEC's
enforcement reached across the securities industry, targeting traditional
frauds and adapting to new threats such as crypto asset securities and
<a href="https://www.financemagnates.com/terms/c/cybersecurity/">cybersecurity</a> breaches. A diverse group of market participants was scrutinized in
FY23, ranging from public companies and investment entities to individual
gatekeepers and social media influencers. </p><p>“The
investing public benefits from the Division of Enforcement’s work as a cop on
the beat,” said Gary Gensler, the Chairman of SEC.</p><blockquote><p lang="en" dir="ltr">In FY 2023, the SEC filed 784 enforcement actions, obtained orders for nearly $5 billion in financial remedies, and distributed nearly $1 billion to harmed investors. Read more about our Enforcement results for FY 2023: <a href="https://t.co/zDgxp1N3qy">https://t.co/zDgxp1N3qy</a></p>— U.S. Securities and Exchange Commission (@SECGov) <a href="https://twitter.com/SECGov/status/1724521723393958397?ref_src=twsrc%5Etfw">November 14, 2023</a></blockquote><p>Record-Setting Financial
Remedies and Whistleblower Awards</p><p>The
Commission's enforcement actions have culminated in nearly $5 billion in
ordered financial remedies, a close second to the record set in the previous
fiscal year. These included $3.369 billion in disgorgement, prejudgment
interest, and $1.580 billion in civil penalties. Furthermore, the SEC has
achieved a decade-high by barring 133 individuals from executive roles in
public companies.</p><p>“Investor
protection and enhancing public trust in our markets requires that we work with
a sense of urgency, using all the tools in our toolkit,” said Gurbir S. Grewal,
the Director of the Division of Enforcement at SEC. “As today’s results make
clear, that’s precisely what the Enforcement Division did in fiscal year 2023.”</p><p>The SEC
also made substantial investor reimbursements, distributing $930 million to
those harmed. <a href="https://www.financemagnates.com/tag/whistleblower/" target="_blank" rel="follow">The Whistleblower Program</a> granted nearly $600 million in awards,
with a single <a href="https://www.financemagnates.com/terms/w/whistleblower/">whistleblower</a> receiving $279 million. The program witnessed an
influx of over 18,000 tips, a significant uptick from the prior year and part
of over 40,000 total tips, complaints, and referrals received, marking a 13% rise
from the fiscal year 2022.</p><p>SEC Shows Examples of Its Actions</p><p>In its
latest report, the SEC also detailed a series of actions taken across various
market segments to uphold federal securities laws and protect investors. For
instance, one of the enforcement involved twenty-five advisory firms,
broker-dealers, and credit rating agencies, <a href="https://www.financemagnates.com/institutional-forex/sec-fines-11-wall-street-firms-for-alleged-recordkeeping-violations/" target="_blank" rel="follow">including prominent names such as
Wells Fargo</a>, HSBC, and Scotia Capital. Collectively, these entities consented
to pay over $400 million in civil penalties to resolve allegations that they
failed to comply with recordkeeping requirements.</p><p>In
addition, the agency launched multiple enforcement actions against individuals
accused of orchestrating affinity frauds and Ponzi schemes. These schemes
preyed on specific communities, exploiting trusted relationships within these
groups. For example, the regulator cites <a href="https://www.financemagnates.com/cryptocurrency/sec-busts-bkcoin-for-running-100m-ponzi-like-scheme/" target="_blank" rel="follow">the case of BKCoin</a>, which ran a $100
million financial pyramid scheme.</p><p>Furthermore,
the SEC cracked down on a securities fraud scheme perpetrated <a href="https://www.financemagnates.com/fintech/us-sec-charges-8-twitter-influencers-with-100m-pump-and-dump-fraud/" target="_blank" rel="follow">by eight social
media influencers</a>. These individuals allegedly exploited their online presence
to manipulate exchange-traded stocks.</p>

This article was written by Damian Chmiel at www.financemagnates.com.