SEC Reports Second-Highest Financial Remedies in Fiscal Year 2023

The Securities and Exchange Commission (SEC) concluded fiscal year 2023 with a notable achievement, securing its second-highest total of financial remedies ordered in a single year. According to the agency's enforcement results released on Tuesday, the SEC obtained orders for nearly $5 billion in financial remedies during the fiscal year that ended on September 30. While this fell short of the record-setting $6.4 billion collected in fiscal year 2022, it marked a substantial success.

In a departure from the previous fiscal year, where civil penalties played a dominant role, the SEC's success in FY23 was driven primarily by disgorgement and prejudgment interest. Financial remedies comprised nearly $3.4 billion in disgorgement and prejudgment interest, along with almost $1.6 billion in civil penalties, both ranking as the second-highest amounts on record.

Throughout FY23, the SEC initiated a total of 784 enforcement actions, reflecting a 3 percent increase over the preceding fiscal year. The agency underscored its commitment to corporate accountability by securing orders barring 133 individuals from serving as officers and directors of public companies, marking the highest such number in a decade.

Whistleblower awards reached unprecedented levels during FY23, totaling nearly $600 million—a record-breaking figure. Notably, a substantial portion of this sum, a $279 million payout to an individual announced in May, contributed significantly to the overall whistleblower awards. The SEC disclosed that it received an overwhelming 18,000 whistleblower tips in FY23, surpassing the previous record of 12,300 in FY22.

The SEC also highlighted instances where it recognized and rewarded meaningful cooperation by companies. Notable cases included actions against GTT Communications and View, both featuring a declination of civil penalties for cooperation. Additionally, Perella Weinberg Partners, implicated in the agency's off-channel communications sweep, received a comparatively smaller penalty of $2.5 million. The reduced penalty was attributed to the firm's proactive self-reporting of violations and remediation efforts.

Among the standout cases pursued by the SEC during FY23 were enforcement actions against ABB, Royal Philips, and Albemarle, involving alleged violations of the Foreign Corrupt Practices Act.

Gurbir Grewal, SEC Enforcement Director, expressed pride in the division's efforts during FY23, emphasizing its dedication to protecting investors through initiatives such as leveraging risk-based approaches, seeking robust remedies, rewarding cooperation, and returning nearly a billion dollars to harmed investors. As the fiscal year came to a close, the SEC's Enforcement Division demonstrated a steadfast commitment to upholding the interests of the investing public.

By fLEXI tEAM