SEC Enforcement Achieves Record Financial Remedies
The U.S. Securities and Exchange Commission secured $8.2 billion in financial remedies for investors in 2024, despite the number of its total enforcement actions declining by 26% compared to the previous year. The driver was a landmark case against Terraform Labs and its founder, Do Kwon; $4.5 billion in penalties represented the highest financial remedy the agency has ever received as a result of a trial and accounted for more than half the annual total.
SEC’s 2024 Enforcement Review
The enforcement division of the SEC brought 583 actions in 2024. Included were:
- 431 stand-alone actions, which were 14% fewer.
- 93 follow-on administrative proceedings, which were down 43%.
- 59 delinquent filing cases, which were down 51%.
- Although the number of cases was lower, the financial remedies recovered reached $6.1 billion in disgorgements and prejudgment interest, and $2.1 billion in civil penalties.
Crypto Cases-In Brief
The commission concentrated on high-profile cases involving cryptocurrency. Among the key cases highlighted were:
Silvergate Capital for misleading disclosures on Bank Secrecy Act and anti-money laundering compliance.
Barnbridge DAO, charged with unregistered securities offerings.
The HyperFund pyramid scheme, which defrauded investors of $1.7 billion.
The NovaTech Ponzi scheme, impacting over 200,000 investors.
First-time enforcement actions targeting relationship investment scams on platforms like NanoBit and CoinW6.
These efforts underscored the SEC’s commitment to combating fraud and protecting investors in the rapidly evolving crypto landscape.
Investor Protections Strengthened
Along with enforcement actions, the SEC emphasized investor protection and market integrity. It barred 124 persons from acting as officers or directors of public companies. It returned $345 million to injured investors in 2024 alone. A record 45,130 tips, complaints, and referrals were processed, including more than 24,000 whistleblower tips. These efforts spearheaded $255 million in whistleblower awards.
Leadership Perspectives
SEC Chairman Gary Gensler lauded the agency as a “steadfast cop on the beat.” Acting Director of Enforcement Sanjay Wadhwa hailed greater cooperation from market participants, including self-reporting. Gensler, who finishes his term as chairman in January 2024, was criticized by a part of the crypto industry but definitely leaves behind a legacy in the realm of robust enforcement.
As the SEC continues to evolve along with the challenge of financial market demands, through its enforcement actions in 2024, it reiterates its commitment to protection for investors and integrity within the markets.
