U.S. federal government shutdown didn’t slow down the SEC

By James Langton | November 6, 2019 | Last updated on November 6, 2019
2 min read
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Enforcement activity at the U.S. Securities and Exchange Commission (SEC) ticked up in fiscal 2019, according to the latest data from the agency’s enforcement division.

In its new annual report, the SEC reported that it brought a total of 862 enforcement actions in 2019, up from 821 in the previous year. The volume of standalone enforcement action also rose, from 490 in 2018 to 526 this year.

This 7% year-over-year increase came in spite of the U.S. federal government shutdown in December and January that resulted in “an almost total cessation of activity for 35 days,” the SEC noted.

Alongside the increase in the number of cases, enforcement sanctions also increased in fiscal 2019.

The SEC reported that total monetary sanctions came in at $4.3 billion (all figures U.S. dollars), which was up by about 10% from the previous year. The was due to a jump in disgorgement orders, which reached $3.25 billion, up from $2.5 billion in 2018. The penalties ordered against securities law violators declined to $1.1 billion in 2019, down from $1.4 billion in 2018.

In 2019, the SEC returned $1.2 billion to investors, up from $794 million the previous year. It imposed 595 bans and suspensions, also an increase from last year.

“The results depicted in this report reflect the division’s focus on rooting out misconduct that can do significant harm to investors and our markets, and the focus the division places on identifying wrongdoing and taking prompt action to effectively help harmed investors,” SEC chair Jay Clayton said in a statement.

The report also noted that the SEC received thousands of whistleblower tips and a record number of whistleblower claims in fiscal 2019.

“In response, we have been working to streamline and substantially accelerate the evaluation of claims for whistleblower awards and we expect to see substantial improvement [in 2020],” the report stated.

Read the full report.

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James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.