SEC Secures $5 Billion in Penalties in Fiscal Year 2023, Benefiting Investors

During the 2023 fiscal year, the U.S. Securities and Exchange Commission (SEC) demonstrated robust enforcement activity, filing a total of 784 actions and securing approximately $4.9 billion in penalties. Notably, the SEC was able to redistribute $930 million of these funds to investors impacted by various violations.

This fiscal year saw a significant increase in reports of violations, with the SEC receiving a record 18,000 reports, marking a near 50% surge from the previous year. The agency also processed over 40,000 complaints and requests from the public.

In its efforts to combat illegal activities, the SEC awarded over $600 million to whistleblowers who provided crucial information leading to successful enforcement actions.

Some of the most substantial fines levied this year included a $400 million settlement from financial institutions such as Wells Fargo, HSBC, and Scotia Capital for failing to adhere to federal record-keeping and customer protection norms. Additionally, Danske Bank was penalized $178.6 million for misleading investors about its anti-money laundering measures.

The SEC utilized its authority to freeze assets in criminal cases twice in 2023. The first instance involved a Florida resident implicated in orchestrating a $100 million pyramid scheme, and the second targeted Miami-based BKCoin Management for its involvement in a $100 million cryptocurrency scam.

The SEC’s report highlighted significant legal actions taken against major figures and entities in the cryptocurrency sector. These included charges against Terraform Labs and its founder Do Kwon, Richard Hurt along with his affiliated companies Hex, PulseChain, and PulseX, and FTX CEO Sam Bankman-Fried alongside other executives of the firm.

Moreover, the report underscored the SEC’s lawsuits against several companies for allegedly offering unregistered securities through cryptocurrency asset lending or staking programs.