On November 18th, the SEC’s Division of Enforcement announced that in fiscal year 2021, it saw a number of critically important and first-of-their-kind enforcement actions to further endeavors to protect investors and promote market integrity. The agency also noted record-breaking achievements for and contributions to enforcement actions from its whistleblower program in fiscal year 2021.

The SEC reported a considerable amount of actions brought in fiscal year 2021, including the following:

• 697 total enforcement actions, representing a 3 percent decrease over total actions filed in fiscal year 2020
• 434 new enforcement actions, representing a 7 percent increase over fiscal year 2020 (70% of the new actions involved at least one individual defendant or respondent.)
• 120 actions against issuers who were delinquent in making required filings with the SEC
• 143 “follow-on” administrative proceedings seeking bars against individuals based on criminal convictions, civil injunctions, or other orders

The SEC also obtained judgments and orders in fiscal year 2021 for more than $1.4 billion in penalties (a 33% increase over amounts ordered in fiscal year 2020) and nearly $2.4 billion in disgorgement (a 33% decrease from amounts ordered in fiscal year 2020).

In fiscal year 2021, the SEC filed notable enforcement actions across new areas, including a number of first-of-their-kind actions regarding:

1. Securities law violations on the “dark web”
2. Securities using decentralized finance, or “DeFi,” technology
3. Regulation crowdfunding
4. Enforcing a key rule on the duties of municipal advisors
5. Charging an alternative data provider with securities fraud
6. Proceedings against an order and execution management system provider that facilitated electronic trading for failing to register as a broker-dealer
7. Failures to timely file and deliver Forms CRS

The new actions in fiscal year 2021 spanned securities across the board, including actions against rising threats in the cryptocurrency and SPAC (special-purpose acquisition company) sectors. The following are more examples of enforcement actions in key priority areas:

• Holding individuals accountable
• Ensuring gatekeepers live up to their obligations
• Policing financial fraud and issuer disclosure
• Charging improper conduct by investment professionals
• Protecting market integrity
• Cracking down on insider trading and market manipulation
• Enforcing the Foreign Corrupt Practices Act
• Guarding against public finance abuse
• Pursuing wrongdoing in securities offerings
• Swiftly acting to protect investors
• Achieving success in litigation

The SEC also reported that in fiscal year 2021, the whistleblower program surpassed $1 billion in awards since its inception. The milestone was reached when substantial amounts were awarded to two whistleblowers: one whose information and assistance led to the successful enforcement of an SEC action and related actions by another agency, and another who provided crucial independent analysis that furthered both the SEC’s investigation and another agency’s related investigation. The SEC also took action to protect whistleblowers by charging entities who violate whistleblower protection laws and rules.

For more information on the SEC’s enforcement results for fiscal year 2021 or further breakdown of fiscal year 2021 enforcement statistics, visit sec.gov.

Source:

SEC Announces Enforcement Results for FY 2021 (sec.gov)

Addendum: FY21 Enforcement Statistics (sec.gov)