Investment advisors and investment companies continued to be the lead target of all Securities and Exchange Commission enforcement proceedings, accounting for a whopping 34% of the actions the SEC brought in fiscal year 2019, according to an enforcement annual report released today.

Advisor enforcements were up some 12% in the past year, the Division of Enforcement said. In contrast, broker-dealers accounted for 7% of SEC enforcements in FY 2019, down from 13% in FY 2018.

In all, the SEC brought 862 enforcement actions –526 of which were “standalone” actions–and obtained judgments and orders totaling more than $4.3 billion in disgorgement and penalties.Of the $4.3 billion, the SEC returned roughly $1.2 billion to harmed investors.

 “The report confirms that enforcement continues to be a priority of the SEC,” said John Berry, a former SEC regulator and now partner in the Los Angeles office of Munger, Tolles & Olson, LLP.

“Many had predicted that, given the change in administration and the government shutdown earlier this year, SEC enforcement activity would drop this year. They were wrong.”

The report also shows that the focus of SEC Chair Clayton on the retail investor has had a real impact on the Enforcement Division – the main cases the SEC brought in SEC were cases involving offering frauds and cases against investment advisors, noted Berry, who was associate regional director in the SEC’s Los Angeles office until earlier in 2019.

“Those are the kinds of cases that have the biggest impact on the ‘Main Street’ investor that Chair Clayton has made a priority,” he added.

The total monetary relief the SEC awarded rose $404 million, a 10% increase over FY 2018, the division reported.

The size of penalties and disgorgements also increased aggressively, year over year. The median disgorgement ordered in FY 2019 was $694,663, up from $454,177 a year earlier. The median penalty hit the $200,000 mark, up from $160,000 in FY 2018.

The results “reflect the division’s focus on rooting out misconduct that can do significant harm to investors and our markets, and the focus the division places on identifying wrongdoing and taking prompt action to effectively help harmed investors,” SEC Chairman Jay Clayton said in a statement.

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