U.S. SEC stepped up enforcement activity in fy2022, assessed record penalties

The seal of the U.S. Securities and Exchange Commission (SEC) is seen at their  headquarters in Washington, D.C.
The seal of the U.S. Securities and Exchange Commission (SEC) is seen at their headquarters in Washington, D.C., U.S., May 12, 2021. REUTERS/Andrew Kelly/File Photo

NEW YORK, Nov 15 (Reuters) - The U.S. Securities and Exchange Commission assessed a record $6.4 billion in fines and ill-gotten gains as it picked up the pace of enforcement in fiscal 2022, the agency said in an annual report on Wednesday.

The total assessed included a record $4.2 billion in civil penalties, up from a total amount of $3.6 billion in 2021, as it filed 760 total enforcement actions, including 462 new or stand-alone ones.

"While we set a Commission record this past fiscal year for total money ordered at $6.4 billion, including a record $4.2 billion in penalties, we don’t expect to break these records and set new ones each year because we expect behaviors to change," said Gurbir Grewal, director of the division of enforcement.

The SEC chair previously announced the amount of fines and fees assessed, but the annual report published on Wednesday provided more details in its roundup of activity in the year ended Sept. 30.

SEC actions against JP Morgan Securities LLC, 15 other broker dealers, and one investment adviser for widespread and long-standing failures to maintain and preserve work-related text messages conducted on employees' personal devices made up over $1.2 billion of SEC penalties in 2022. The orders included admissions of the wrongful conduct and acknowledgements of violations from all 17 firms.

The SEC also filed charges against Deloitte's China-based affiliate of failing to comply with U.S. auditing requirements and secured a record penalty against crypto firm BlockFi for selling unregistered securities.

Disgorgement, at $2.245 billion, was down 6% from 2021.

The SEC gave $229 million to 103 whistleblowers. That was the second-highest year in terms of dollar amounts and number of awards doled out by the agency, with fiscal 2021 having been a record year, with $564 million in awards to 108 whistleblowers.

Reporting by John McCrank in New York; Additional reporting by Chris Prentice; Editing by Jonathan Oatis

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