Washington D.C., Nov. 2, 2018 — The Securities and Exchange Commission’s Enforcement Division today issued the annual report of its ongoing efforts to protect investors and market integrity. The report also highlights several significant actions and initiatives that took place in FY 2018. The report presents the activities of the Division from both a qualitative and quantitative perspective.
“As this report demonstrates, the Division’s approach to enforcement is multifaceted and outcomes-oriented with the interests of our Main Street investors front of mind,” said SEC Chairman Jay Clayton. “The Enforcement Division has been and continues to be extremely successful in its efforts to deter bad conduct and effectively remedy harms to investors. I thank the women and men of the Division, in our home office and in our 11 regional offices, for their continued dedication to our mission.”
In accordance with Chairman Clayton’s charge to focus on Main Street investors, Division of Enforcement Co-Directors Stephanie Avakian and Steven Peikin previously outlined five core principles that serve to guide the work of the division.
The core principles – focus on the Main Street investor, focus on individual accountability, keep pace with technological change, impose remedies that most effectively further enforcement goals, and constantly assess the allocation of resources – were first described in the Division’s FY 2017 annual report. The Division’s adherence to these principles resulted in meaningful results, including the return of almost $800 million to harmed investors, holding individuals – including many at the highest level – accountable, barring bad actors from the securities markets, and sending strong messages of deterrence. The impact of these actions has unquestionably protected investors of all types, particularly retail investors.
The Division’s focus on obtaining relief for harmed investors is underscored by various retail investor-specific initiatives. One example is the Division’s Share Class Selection Disclosure Initiative, a self-reporting initiative designed to quickly return money to investors who may have been harmed by failures to disclose conflicts of interests related to the selection of mutual fund share classes.
Also illustrative of the Division’s impact in protecting investors and market integrity is the groundbreaking approach to addressing misconduct involving initial coin offerings and digital assets, which reflects a focus on cases that deliver strong and clear messages and have broad market impact.
“As stewards of the SEC’s Division of Enforcement, our goal is to continue to protect investors, deter misconduct, punish wrongdoers and keep our markets the safest and strongest in the world,” said Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement.
“This year’s report again shows a broad range of significant enforcement actions, a thoughtful approach to remedies and relief, and the return of substantial sums to investors,” said Steven Peikin, Co-Director of the SEC’s Enforcement Division.
Quantitatively, the SEC brought a diverse mix of 821 enforcement actions, including 490 standalone actions, and returned $794 million to harmed investors. A significant number of the SEC’s standalone cases concerned investment advisory issues, securities offerings, and issuer reporting/accounting and auditing, collectively comprising approximately 63 percent of the overall number of standalone actions. The SEC also continued to bring actions relating to market manipulation, insider trading, and broker-dealer misconduct, with each comprising approximately 10 percent of the overall number of standalone actions, as well as other areas. And it obtained judgments and orders totaling more than $3.945 billion in disgorgement and penalties.