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compliance
The Securities and Exchange Commission (SEC) released its enforcement statistics for fiscal year 2024, filing 583 total enforcement actions and securing $8.2 billion in financial remedies—the largest annual amount in the agency’s history.
Self-Reporting & Cooperation:
Across public companies, broker-dealers, and investment advisers, increased self-reporting, remediation, and cooperation were met with reduced or no civil penalties in certain cases. The SEC reinforced the value of proactive compliance through these outcomes.
Off-Channel Communications:
The SEC continued its recordkeeping enforcement initiative, resulting in over $600 million in civil penalties from more than 70 firms, including the first such actions against municipal advisors.
Marketing Rule Violations:
Over a dozen investment advisers settled charges related to improper advertising practices, including misuse of hypothetical performance data and unsubstantiated performance claims.
Whistleblower Protection:
The SEC enforced compliance with Rule 21F-17 under the Dodd-Frank Act, including a record $18 million penalty for impeding whistleblower communications.
Disclosure Failures:
Over two dozen entities and individuals settled charges for failing to disclose securities holdings or transactions as required. Also, 11 institutional investment managers were charged for deficient 13F filings.
Cybersecurity:
Enforcement actions included failures to disclose cyber intrusions and inadequate internal controls, with significant settlements imposed.
Market Abuse and Material Non-Public Information Controls:
Investment advisers and individuals were charged for failing to maintain adequate controls to prevent misuse of material nonpublic information.
Use of Emerging Technologies:
Firms faced charges for false statements about the use of artificial intelligence in their investment processes.
Gatekeeper Accountability:
Audit firms and senior personnel were held accountable for systemic failures, including independence violations and fraudulent audit practices.
Public Company Misstatements:
Actions were brought for materially misleading disclosures, particularly in clinical trial results, financial performance, and revenue recognition.
Whistleblower Program:
The SEC received a record 45,130 tips, including over 24,000 whistleblower submissions, and issued $255 million in awards.
The SEC’s 2024 results underscore a continued emphasis on internal controls, accurate disclosure, and recordkeeping. Firms demonstrating proactive compliance practices benefited from more favorable resolutions, while failures in core governance areas led to significant penalties and sanctions.
For more information regarding the 2024 enforcement results, please find the SEC Press Release here.
In light of the SEC’s continued focus on enforcement, Coast to Coast Compliance helps firms reduce regulatory risk through targeted services such as mock SEC exams, compliance program reviews, and advertising material assessments. We can help prepare your firm to respond confidently to inquiries and proactively address areas that frequently trigger enforcement.
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