The SEC’s enforcement statistics for fiscal year 2024 reveal a complex picture of regulatory oversight, with total enforcement actions declining while financial remedies reached unprecedented levels. Let’s examine the key developments and their implications.
A Year of Contrasting Numbers
The SEC reported 583 enforcement actions in FY2024, marking a 26% decrease from the previous year. However, total financial remedies soared to $8.2 billion – the highest amount ever recorded. Several key factors explain this striking contrast:
Case Volume and Activity
- October 2024 showed increased activity, with 2.5 times more enforcement cases than October 2023
- Despite this uptick, FY2024’s total enforcement actions remained lower than the previous five years
- The SEC’s Acting Director of Enforcement emphasizes focusing on qualitative accomplishments rather than just numbers
Breaking Down the Record Financial Remedies
Context is crucial when examining the historic $8.2 billion in financial remedies. The majority, approximately 56%, came from a single case involving Terraform Labs and Do Kwon, one of the largest securities frauds in U.S. history. When this outlier is excluded, the remaining $3.6 billion actually represents a 27% decline from FY2023 and would mark the lowest total since before FY2019.
The Impact of Off-Channel Communications Cases
The SEC’s focus on off-channel communications yielded significant results in FY2024:
- More than 70 firms faced remedies totaling $600 million
- The ongoing sweep has now reached over 100 firms
- Total remedies since December 2021 exceed $2 billion
FCPA Enforcement: A Notable Shift
Foreign Corrupt Practices Act enforcement saw an unprecedented decline in FY2024, with just two cases initiated – marking the first time FCPA cases effectively represented 0% of total actions. However, early indicators from FY2025 suggest a potential rebound, with four significant FCPA cases already filed since the fiscal year’s end.
Legal Developments Shape Enforcement Strategy
The June 2024 Supreme Court decision in SEC v. Jarkesy has significantly influenced enforcement procedures. This ruling, which affirmed defendants’ right to jury trials in SEC civil penalty cases, prompted extensive internal reviews and new settlement language requirements for administrative proceedings involving remedies.
Looking Forward
As the enforcement landscape continues to evolve, compliance teams should focus on several key priorities: strengthening retail-facing controls, enhancing documentation of investor communications, and updating policies around electronic communications given the continued scrutiny of off-channel violations. While the SEC appears to be scaling back civil monetary remedies against public companies, this shift emphasizes prevention and early detection rather than reduced oversight. For compliance departments, the focus should be on creating detailed records of cooperative efforts and remedial measures, as the agency continues to value but struggles to quantify cooperation credit. These patterns will likely continue to shape both the SEC’s enforcement priorities and compliance program structures throughout FY2025.
The mixed results of FY2024 highlight the complexity of modern securities enforcement, where raw numbers tell only part of the story. As we move deeper into FY2025, these patterns will likely continue to shape the SEC’s enforcement priorities and strategies.
