On November 2nd, the SEC’s Division of Enforcement issued its annual report for fiscal year 2020. The report provides details on the Division’s COVID-19-related enforcement efforts, reviews substantial actions and significant areas of strategic change, and provides a thorough look at the Division’s achievements over the past year.
Fiscal Year 2020 COVID-19 Pandemic Measures
While continuing to focus on the abundance of current and new non-COVID-related enforcement issues that normally arise, the 2020 report outlines how the Division took affirmative measures to prevent potential fraud associated with the COVID-19 pandemic by:
- forming the Coronavirus Steering Committee to centralize and coordinate efforts to meet the risks to market integrity and investors posed by the pandemic
- bringing actions against wrongdoers who sought to gain from the pandemic’s challengesdedicating substantial resources to address the subsequent market conditions
- protecting retail investors by proactively looking for wrongdoing
Fiscal Year 2020 Significant Actions and Strategic Change
The report also discusses strategic modifications the Division introduced to improve its operations in several important areas. The revisions in the report enhanced operations by:
- implementing a number of efficiencies in the whistleblower program
- accelerating the pace of investigations by including remote testimonies and depositions
- placing special emphasis on the Division’s dedication to fundamental principles, including:
- protecting retail investors
- focusing on individual accountability
- implementation of remedies that most effectively advance enforcement goals
Fiscal Year 2020 Achievements
The SEC brought a divergent mix of 715 enforcement actions during fiscal year 2020, including 405 standalone actions. These actions covered a broad range of significant issues, including:
- issuer disclosure
- accounting violations
- foreign bribery
- investment advisory issues
- securities offerings
- market manipulation
- insider trading
- broker-dealer misconduct
Through these actions, the SEC obtained judgments and orders in the record-breaking amount of $4.68 billion in disgorgement and penalties and returned more than $600 million to harmed investors. The SEC also awarded 39 whistleblowers a record $175 million in fiscal year 2020, both the greatest dollar amount and the greatest number of individuals awarded in any fiscal year.
Sources:
SEC Division of Enforcement Publishes Annual Report for Fiscal Year 2020 (sec.gov)
Enforcement Annual Report 2020 (sec.gov)
