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Enforcement Actions, Penalties Up in Fiscal Year 2019

The SEC’s Enforcement Division’s annual report for fiscal year 2019 highlights several significant actions and presents the Division’s activities from both a qualitative and quantitative perspective. In fiscal year 2019, the SEC brought a diverse mix of 862 enforcement actions, including 526 standalone actions. By comparison, the SEC brought 821 enforcement actions in 2018, 754 in 2017, 868 in 2016, and 807 in 2015.  The 2019 actions addressed a range of issues, including issuer disclosure/accounting violations; auditor misconduct; investment advisory issues; securities offerings; market manipulation; insider trading; and broker-dealer misconduct. Through these actions, the SEC obtained judgments and orders totaling more than $4.3 billion in disgorgement and penalties, the highest amount since 1987 according to a report in the Wall Street Journal which also noted that the SEC’s reported collection rate for such judgments and orders is about 57 percent. According to the Enforcement Division’s report, the SEC returned roughly $1.2 billion to harmed investors as a result of enforcement actions. Division staff noted that as a result of the Share Class Selection Disclosure Initiative, 95 investment advisory firms that voluntarily self-reported to the Division were ordered to return a total of over $135 million to affected mutual fund investors, in keeping with the Commission’s broader initiatives to protect retail investors.

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