- The Securities and Exchange Commission filed 784 enforcement actions, obtained $4.949 billion in monetary relief, including almost $1 billion returned to investors, and processed more than 18,000 whistleblower tips, the agency says in its fiscal year 2023 enforcement report. The fiscal year ended on September 30.
- “Whether it was by leveraging risk-based initiatives, seeking robust remedies, rewarding cooperation, protecting whistleblowers or returning nearly a billion dollars to harmed investors, the enforcement division stood up for the investing public,” Gurbir Grewal, the agency’s enforcement director, said in a statement.
- The agency gave a number of companies a break for their cooperation in an initiative the agency has been touting for the past year. Among the companies walking away penalty-free despite wrongdoing were GTT Communications, which self-reported mistakes it had made on its financial statements, and window manufacturer View, which self-reported liabilities it had failed to disclose. “Rewarding parties that cooperate encourages other firms to proactively self-police, self-report and remediate potential securities law violations,” the agency said.
Whistleblowers have grown to become one of the agency’s big enforcement triggers since the program was created about a decade ago. The more than 18,000 tips it received was roughly 50% more than its previous one-year high, of 12,300 in fiscal 2022.
The agency paid a record $600 million in awards, including a record $279 million to one person. Because of confidentiality rules, the agency doesn’t disclose details about the people or companies involved. To-date, the program has paid out some $2 billion in awards when added to those paid by the Commodity Futures Trading Commission.
To help ensure the program remains a big part of its efforts, the agency went after companies that use employment agreement clauses to discourage employees from talking to agencies. For example, it hit D.E. Shaw, a brokerage, with a $10 million fine for tying severance pay to employees signing a release saying they didn’t talk to agencies, among other things.
Holding executives personally liable has been another of the agency’s initiatives. Two-thirds of the cases included charges against individuals, and of those, more than 130 led to personal sanctions that include barring the executives from serving as an officer or director of a public company, the highest number of debarments in a decade.
“Individual accountability remains a pillar of the SEC’s enforcement program,” the agency said.
Executives from Wells Fargo and McDonald’s Corp. were among those barred.
Big-name companies were also among those that received some of the biggest penalties.
Wells Fargo and HSBC were among the companies sharing in a more than $400 million penalty for their employees’ use of instant messaging apps to conduct business in violation of recordkeeping requirements.
Other companies hit with big fines, for different violations, were Danske Bank for $179 million, ABB, a tech firm, for $75 million and Vale, a mining company, for $60 million.
“Last fiscal year’s results demonstrate yet again the division’s effectiveness,” SEC Chair Gary Genseler said.