Big picture, the commission brought 821 actions (490 of which were “stand alone” actions) and obtained judgments and orders totaling more than $3.9 billion in disgorgement and penalties, according to the annual report. Significantly, the SEC returned $794 million to harmed investors, suspended trading in the securities of 280 companies, and obtained nearly 550 bars and suspensions. “By these raw metrics, our overall results improved compared to FY 2017,” according to the SEC.
In fact, the Enforcement Division’s crackdown on wrongdoing against retail investors accounted for half of the stand-alone enforcement actions brought by the agency in 2018. RIA violations accounted for a full 22% of these enforcement actions, while broker-dealer misconduct accounted for 13%, securities offerings for 25%, issuer reporting/accounting and auditing for 16%, insider trading for 10% and market manipulation for 7%.
The data analytics produced by groups throughout the commission are playing an ever-bigger role in “lead generation” for enforcement cases, the SEC said. In addition to the 2018 launch of the Retail Strategy Task Force, the SEC’s Enforcement Division also announced a second initiative this past year designed to focus on misconduct that occurs in the interactions between investment professionals and their clients, according to the report.
Over the past fiscal year, the Enforcement Division investigated and recommended to the commission hundreds of cases alleging misconduct perpetrated against retail investors. Many of those cases were simultaneously resolved, resulting in meaningful and prompt relief. The rest are being pursued through litigation.