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SEC’s Division of Enforcement Year-End Results Announcement Reflects Transition in Enforcement Priorities and Chair Gensler’s Enforcement Agenda
29 November 2021
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On November 18, 2021, the U.S. Securities and Exchange Commission’s (the “SEC” or “Commission”) Division of Enforcement (the “Division”) announced its enforcement results for fiscal year 2021 (“FY 2021”), the period spanning October 1, 2020 to September 30, 2021. Though this year’s results largely reflect the previous administration’s priorities and the continued challenges of the COVID-19 pandemic, the press release accompanying the results offers insight into the Commission’s likely direction under Chair Gary Gensler’s leadership.
The results highlight an uptick in enforcement, with the SEC bringing 434 stand-alone enforcement actions—a 7% increase from FY 2020. However, this number remains low by historical standards when compared to the 526 stand-alone actions brought in FY 2019. The SEC also obtained a total of $3.85 billion in relief during FY 2021, which represents a significant drop from the approximately $4.7 billion ordered in FY 2020. At the same time, this was a record-breaking year for the SEC’s whistleblower program, which issued 108 awards for $564 million and surpassed the $1 billion mark for total amounts awarded since the program’s inception.
As the world continues to emerge from the COVID-19 pandemic and as the new administration moves into its first full fiscal year, we expect to see a significant ramp-up in investigative and enforcement activity during FY 2022. As highlighted in the press release accompanying FY 2021’s results, we expect the SEC to prioritize investigation and enforcement of emerging risks like digital assets and special purpose acquisition companies (“SPACs”). At the same time, the Division will keep a sharp focus on traditional areas of enforcement, including securities offerings, accounting and auditing actions, and investment adviser and investment company issues. Due to continued whistleblower activity and the disgorgement authority granted to the Commission in January’s National Defense Authorization Act (“NDAA”), the total relief ordered is likely to rise as well.
White Collar & Regulatory Defense
Andrew J. Ceresney
Arian M. June
Robert B. Kaplan
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