SEC enforcement

On November 18, the U.S. Securities and Exchange Commission (SEC) announced its enforcement results for the 2021 fiscal year, which ended on September 30, 2021. The SEC reported that it filed 434 new enforcement actions in FY2021, a 7% increase over FY2020. According to the press release, “[t]he SEC’s whistleblower program was critical to these efforts and had a record-breaking year.”

Overall, the SEC filed 697 total enforcement actions in FY2021, including the 434 new actions. These actions covered a wide variety of securities violations, including new emerging threats in areas such as cryptocurrency. The agency obtained judgments and orders for nearly $2.4 billion in disgorgement and more than $1.4 billion in penalties.

“The SEC’s Enforcement Division is the cop on the beat for America’s securities laws,” said Chair Gary Gensler. “As these results show, we go after misconduct wherever we find it in the financial system, holding individuals and companies accountable, without fear or favor, across the $100-plus trillion capital markets we oversee.”

“This year has seen a number of critically important and first-of-their-kind enforcement actions, as well as record-breaking achievements for our whistleblower program, which we expect will lead to even more successful actions in the future,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Undeterred by the challenges of the pandemic, the dedicated public servants in the Enforcement Division have continued to overcome obstacles to bring these cases that protect investors and promote market integrity.”

Some of the new enforcement actions taken by the SEC in FY2021 include “involving securities using decentralized finance, or ‘DeFi,’ technology; charging securities law violations on the ‘dark web’; enforcing a key rule on the duties of municipal advisors; involving Regulation Crowdfunding; and charging an alternative data provider with securities fraud,” according to the press release.

As noted by Grewal, FY2021 was a record year for the SEC Whistleblower Program. Over the course of FY2021, the SEC Whistleblower Program received a record 12,200 whistleblower tips and issued a record $564 million in whistleblower awards to a record 108 individuals. Over the course of the year, the whistleblower program issued more awards than in all previous years combined.

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