The Securities and Exchange Commission filed a record 760 enforcement actions—a 9% increase over the prior year -- and recovered a record $6.4 billion in penalties and disgorgement in fiscal year 2021, the agency announced today. 

The agency’s record number of enforcements ran the gamut of from "first-of-their-kind" actions such as the Regulation Best Interest case it filed against Western International Securities, Inc. (Western) to cases charging traditional securities law violations, including 169 "follow-on" administrative proceedings seeking to bar or suspend individuals.

"I continue to be impressed with our Division of Enforcement. These numbers, though, tell only part of the story," SEC Chair Gary Gensler said in a statement. "Enforcement results change from year to year. What stays the same is the staff’s commitment to follow the facts wherever they lead."

On the advisor front, the SEC obtained a record $25 million settlement from UBS Financial Services, Inc., related to the firm’s Yield Enhancement Strategy (YES). The SEC alleged that UBS failed to adequately train its financial advisors and advise them of the risks associated with the strategy, which resulted in surprise losses to clients. The firm settled without admitting or denying guilt.

Angel Oak Capital Advisors was charged and settled with the SEC for $1.75 million for allegedly misleading investors about the delinquency rates in its 2018 private-label securitization involving fix-and-flip loans.

The agency also brought its first Regulation Best Interest case against Western, a dually registered broker-dealer and investment advisor, along with five of its registered representatives, in the U.S. District Court for the Central District of California. 

The agency charged the defendants with allegedly violating Reg BI’s care obligation by recommending high-risk, speculative bonds to retail customers without themselves fully understanding the associated asset risks and without establishing how the investments served the customers’ best interests.

Money ordered in SEC actions, comprising civil penalties, disgorgement, and pre-judgment interest, totaled $6.439 billion, the most on record in SEC history and up from $3.852 billion in fiscal year 2021, the agency said.

Of the total money ordered, the $4.1 billion in civil penalties levied by the agency, were also the highest on record. 

Disgorgement, at $2.245 billion, decreased by 6% from fiscal year 2021. Fiscal year 2022 was the SEC’s second highest year ever in whistleblower awards, in terms of both the number of individuals awarded and the total dollar amounts awarded.

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