SEC Again Sets Enforcement Record: $4.68 Billion in Penalties/Disgorgement in Fiscal 2020
The SEC’s Enforcement Division obtained judgements and orders totaling $4.68 Billion during fiscal 2020, a record amount, despite bringing fewer cases due to the COVID-19 pandemic. The total included over $1 Billion and penalties and over $3.5 Billion in disgorgement, both increases over the prior fiscal year, which ends on September 30. Although the Enforcement Division brought 17% fewer cases (715 vs. 862), Enforcement Director Stephanie Avakian attributes the decline to COVID-19 limitations, rather than any change in policy or practice. The median money ordered by action ($532,860) outpaced 2015-2018, although the median slightly trailed last year. Actions against investment advisers and investment companies accounted for 21% of cases, the second largest category after securities offering cases. Ms. Avakian lauded the Enforcement Division for a “remarkable level of success.”
Regardless of administration or political leadership, the Enforcement Division keeps chugging along like a litigious Energizer Bunny, setting new enforcement records every year. Don’t expect the Division to suddenly become passive during a Trump second term or a Biden presidency. In fact, both parties have advocated for increased SEC powers and penalties.