US securities regulator sets new enforcement penalties record at $6.4B in 2022

The U.S. Securities and Exchange Commission (SEC) set a new record in the fiscal year 2022, filing 760 enforcement actions and amassing $6.4 billion in penalties and remedies.

In its announcement, the regulator revealed that of the 760, 462 were standalone actions, a 6.5% increase over the previous year. It also filed 169 follow-on administrative actions against individuals based on civil injunctions and criminal convictions, seeking to bar or suspend them from the securities markets.

The $6.4 billion it collected in FY 2022 was the most in the SEC’s history and 67% above the $3.85 billion it collected in FY 2021. Civil penalties accounted for the highest percentage at $4.19 billion, with disgorgement accounting for $2.25 billion.

“I continue to be impressed with our Division of Enforcement. These numbers, though, tell only part of the story. Enforcement results change from year to year. What stays the same is the staff’s commitment to follow the facts wherever they lead,” commented SEC chair Gary Gensler.

While most of the focus was on the mainstream financial and securities market, where it nabbed officials from JPMorgan Securities, Ernst & Young, Barclays, and more, the digital asset industry also saw its fair share of actions by the agency.

These include charges against BlockFi, a digital asset lender, for failing to register its products with the agency. BlockFi was also charged with violating securities laws, the first action of its kind against a digital lender. The company ended up settling for $100 million with the SEC and 32 other U.S. state regulators.

The SEC also cracked down on Forsage, a digital asset pyramid scheme, charging 11 individuals with fraud.

Other actions included insider trading charges against Ishan Wahi, a former product manager at Coinbase (NASDAQ: COIN) who allegedly used his position to front-run traders on soon-to-be-listed tokens.

The agency also went after NVIDIA (NASDAQ: NVDA) for failure to offer adequate disclosures concerning the impact that block reward mining would have on its gaming business.

“As reflected in these results, the Enforcement Division is working with a sense of urgency to protect investors, hold wrongdoers accountable and deter future misconduct in our financial markets,” remarked Gurbir S. Grewal, Director of the Division of Enforcement.

In May, the agency also renamed and doubled its headcount in the Crypto Assets and Cyber Unit.

The actions came at a time when the SEC’s position as the de facto digital asset regulator has come under threat from the CFTC. A bill in Congress is seeking to appoint the CFTC as the industry watchdog, and ‘crypto bros’ have been in full support as they believe the commodity futures watchdog will be more lenient.

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