SEC Reports Record-Breaking Year for Whistleblowers, Increase in New Enforcement Actions
The Securities and Exchange Commission filed 434 new enforcement actions in fiscal year 2021, which ended on September 30th, a 7 percent increase over the prior year. The agency also reported that its whistleblower program had “a record-breaking year.”
The Securities and Exchange Commission filed 434 new enforcement actions in fiscal year 2021, which ended on September 30th, a 7 percent increase over the prior year. The agency also reported that its whistleblower program had “a record-breaking year.”
The SEC filed 697 total enforcement actions in fiscal year 2021, including the 434 new actions, 120 actions against issuers who were delinquent in making required filings with the SEC, and 143 follow-on administrative proceedings seeking bars against individuals based on criminal convictions, civil injunctions, or other orders. This represented a 3 percent decrease over the total actions filed in fiscal year 2020.
In fiscal year 2021, the SEC obtained judgments and orders for nearly $2.4 billion in disgorgement and more than $1.4 billion in penalties, a 33 percent decrease and 33 percent increase, respectively, compared to the prior fiscal year.
The SEC said that its whistleblower program had a record-breaking year and awarded a total of $564 million to 108 whistleblowers. The whistleblower program also surpassed $1 billion in awards over the life of the program.
The SEC gave the highest awards in the program’s history, including a $114 million award to a whistleblower whose information and assistance led to the enforcement of an SEC action and related actions by another agency; and a $110 million award to another whistleblower who provided “significant” independent analysis that advanced both the SEC’s investigation and another agency’s related investigation.
During the year, the SEC charged broker-dealer, Guggenheim Securities, with violating a whistleblower protection rule that prohibits taking any action to impede an individual from communicating directly with the SEC about a possible securities law violation.
The SEC also said that it charged GPB Capital, a registered investment adviser, with allegedly violating whistleblower protection laws by including language in termination and separation agreements that impeded individuals from coming forward to the SEC and by retaliating against a known whistleblower. In addition, the agency charged GPB and its executives with running a Ponzi-like scheme that raised more than $1.7 billion from more than 17,000 retail investors.
A number of “first-of-their-kind” enforcement actions included those involving securities using decentralized finance, Regulation Crowdfunding, and failures to timely file and deliver Forms CRS, as well as charging securities law violations on the “dark web.”
