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SEC Fines Jumped by a Third in 2021

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What You Need to Know

  • Agency filed 697 total enforcement actions in fiscal year 2021.
  • SEC brought more than $1.4 billion in penalties.
  • FY 2021 also a record year for whistleblower awards, with the SEC awarding a total of $564 million.

The Securities and Exchange Commission announced late Thursday that it filed 697 total enforcement actions in fiscal 2021, including 434 new actions, representing a 7% increase over the prior year.

In fiscal year 2021, which ended on Sept. 30, the SEC also obtained judgments and orders for nearly $2.4 billion in disgorgement and more than $1.4 billion in penalties, which represented a respective 33% decrease and 33% increase over amounts ordered in the prior fiscal year.

Seventy percent of the new or “stand-alone” actions involved at least one individual defendant or respondent, the agency’s enforcement division reported, with 120 actions against issuers who were delinquent in making required filings with the SEC.

Another 143 “follow-on” administrative proceedings sought bars against individuals based on criminal convictions, civil injunctions or other orders, representing a 3% decrease over the total actions filed in fiscal year 2020.

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Fiscal 2021 also was a record year for whistleblower awards, with the SEC awarding a total of $564 million to 108 whistleblowers, the agency reported. The whistleblower program also surpassed $1 billion in awards over the life of the program.

SEC Chairman Gary Gensler said Thursday in a statement that “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.”

Gurbir Grewal, Director of the Division of Enforcement, added in the statement that this year “has seen a number of critically important and first-of-their-kind enforcement actions.”

The actions filed across new areas included a number of first-of-their-kind actions:

  • 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;
  • Charging an alternative data provider with securities fraud;
  • Involving failures to timely file and deliver Forms CRS; and
  • Against an order and execution management system provider that facilitated electronic trading for failing to register as a broker-dealer.