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SEC Enforcement Actions Down 17% in 2020

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The Securities and Exchange Commission brought 715 enforcement actions in fiscal 2020, a 17% drop from last year, but financial remedies ordered “set a new high,” according to the agency’s enforcement chief.

The Commission states that it obtained judgments and orders totaling approximately $4.68 billion in disgorgement and penalties – the highest amount on record.

“Ultimately, in the midst of COVID-19, it was a year of contrasts,” Stephanie Avakian, the SEC’s enforcement chief, said Monday in releasing the annual enforcement report.

Similarly, Avakian said, “the number and amount of whistleblower awards exceeded prior years — in fact, awards issued in 2020 accounted for roughly 37% of the total number of individuals awarded over the entire life of the whistleblower program.”

COVID-19 made fiscal 2020 “the most challenging year in recent memory,” she relayed.

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The division triaged approximately 23,650 tips, complaints and referrals and opened close to 1,200 new inquiries and investigations.

The commission brought 492 of the 715 enforcement actions after instituting mandatory telework in mid-March, Avakian said.

Of the cases:

  • 405 were “standalone” actions brought in federal court or as administrative proceedings;
  • 180 were “follow-on” proceedings seeking bars based on the outcome of commission actions or actions by criminal authorities or other regulators; and
  • 130 were proceedings to deregister public companies — typically microcap — that were delinquent in their SEC filings.

The majority of the SEC’s standalone cases concerned securities offerings (32%), investment advisory and investment company issues (21%), and issuer reporting/accounting and auditing (15%) matters.

The SEC also continued to bring actions relating to broker-dealers (10%), insider trading (8%) and market manipulation (5%), as well as other areas such as public finance (3%) and the Foreign Corrupt Practices Act (2%).

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