The Securities and Exchange Commission’s Division of Enforcement increased its enforcement actions by 7% in fiscal year 2021, bringing more actions than in the prior fiscal year and ordering nearly $2.4 billion in disgorgement and more than $1.4 billion in penalties, which represented a respective 33% decrease and 33% increase over 2020, the agency said in its annual report, released late Thursday.
The agency filed 697 total enforcement actions in fiscal year 2021, including the 434 new actions, 120 actions against issuers who were delinquent in making required filings with the SEC, and 143 "follow-on" administrative proceedings seeking bars against individuals based on criminal convictions, civil injunctions, or other orders. This represented a 3 percent decrease over the total actions filed in fiscal year 2020.
"The SEC’s Enforcement Division is the cop on the beat for America’s securities laws," SEC Chairman Gary Gensler said in a release. "As these results show, we go after misconduct wherever we find it in the financial system, holding individuals and companies accountable, without fear or favor, across the $100-plus trillion capital markets we oversee."
The SEC said it filed 120 enforcement actions against delinquent issuers and 143 "follow-on" administrative proceedings seeking bars against individuals as a result of criminal convictions, civil injunctions or other orders.
The total number of actions filed in fiscal year 2021 was a 3% decrease from the prior fiscal year, according to the report.
"This year has seen a number of critically important and first-of-their-kind enforcement actions, as well as record-breaking achievements for our whistleblower program, which we expect will lead to even more successful actions in the future," Gubir S. Grewal, Director of the SEC’s Division of Enforcement, said in a release. "Undeterred by the challenges of the pandemic, the dedicated public servants in the Enforcement Division have continued to overcome obstacles to bring these cases that protect investors and promote market integrity."
Among the actions the SEC highlighted in the annual report is the $97 million enforcement case the enforcement division brought against TIAA-CREF Individual & Institutional Services LLC,, for alleged violations in retirement rollover recommendations. The company settled charges of inaccurate and misleading statements and a failure to adequately disclose conflicts of interest to thousands of participants in TIAA record-kept employer-sponsored retirement plans. “The $97 million was distributed to investors affected by the misconduct and settles both the SEC’s case and a parallel action announced today by the Office of the New York Attorney General (NYAG),” the SEC said.
The SEC also underscored its case against Pruco Securities, LLC, a dually-registered investment adviser and broker-dealer based in New Jersey, that agreed to settle charges for breaches of its fiduciary duty to its advisory clients in Pruco's wrap fee programs.
The settlement provided over $15.75 million to be included in a fund for distribution to Pruco's harmed advisory clients, the Sec said.
Several enforcement actions, meanwhile, were first of their kind, including those related to the customer relationship summary known as Form CRS, which went into effect last year as part of the SEC’s Regulation Best Interest. The SEC charged 27 firms with failing to file or distribute the new investor form.