SEC hands $1.5B penalties to public companies in above-average enforcements

SEC hands $1.5B penalties to public companies in above-average enforcements
Last year saw more action taken than the nine-year historical average.
NOV 21, 2024

The Securities and Exchange Commission handed out increased total financial penalties to public companies and their subsidiaries in fiscal year 2024.

A new analysis shows that $1.5 billion in monetary settlements were agreed in the year compared to $1.3 billion in the previous period, but below the average between 2015 and 2023. However, the number of enforcement actions were down 12% year-over-year while being 5% above the nine-year historic average.  

The numbers crunched by Cornerstone Research also reveal that during five sweeps, the SEC focused on its FY2024 priorities with the 38 actions including 22 for companies’ use of off-channel communications. There was an increase in actions with broker dealer allegations accounting for 29% of all enforcement actions, up from 19% in the previous year.

There were also seven actions for violation of whistleblower protection rules, up from three in the previous fiscal year.

"The SEC's FY 2024 enforcement actions reveal a focus on trends like off-channel communications and whistleblower protection," said Stephen Choi, a report coauthor and the Bernard Petrie Professor of Law and Business at New York University School of Law and Co-Director of the NYU Pollack Center for Law & Business. "We also saw a focus on cooperation and non-monetary settlements, as the agency prioritized efficiency and cooperation in its enforcement approach."

Average settlements paid by firms of $19.8 million was up from $15 million in FY2023 but was above the 2015-2023 average of $24.7 million. The median amount was $3.2 million, down from $4 million in the previous year. The percentage of total monetary settlements from disgorgement and prejudgment interest in civil actions was 15%, the highest percentage since FY 2020.

The report also notes that 75% of the public companies and subsidiaries that cooperated with the SEC investigations in settled actions increased and 34 firms admitted guilt which is a new record.

SEC officials have emphasized that admissions of guilt are a powerful accountability measure," added Sara Gilley, a report coauthor and cohead of the Cornerstone Research securities litigation practice. "Former Director of the SEC's Division of Enforcement Gurbir Grewal indicated that the SEC brought more cases involving admissions of guilt than in prior years to enhance accountability. Our report's findings underscore these comments."

Latest News

'Bogged down' advisors just want to have fun (again)
'Bogged down' advisors just want to have fun (again)

Jim Cahn, of Wealth Enhancement Group, lifts the lid on his firm's partnership model, his views on RIA M&A, and the widely slept-on reason why advisors are merging into larger organizations.

Vestwell unveils new emergency savings account offering
Vestwell unveils new emergency savings account offering

The fintech firm is cementing its status in the workplace savings space with its latest ESA offering, which employers can integrate into their existing benefits package.

'Money Mimosas' and other ways to show your Valentine financial love
'Money Mimosas' and other ways to show your Valentine financial love

Wealth managers offer unique ideas for couples to grow closer emotionally and financially.

Limra research finds financial confidence on the rise among Black American workers
Limra research finds financial confidence on the rise among Black American workers

Survey findings suggest increased sense of financial security and more optimistic 2025 outlook, while highlighting employers' role in ensuring retirement readiness.

DOGE efforts sideswipe muni bonds backed by federal lease payments
DOGE efforts sideswipe muni bonds backed by federal lease payments

Falling prices for some securities within the $4 trillion state and local government debt market spotlight how the push to shrink spending is sending shockwaves across the US.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.