The Securities Exchange Commission (SEC) has achieved a significant milestone in the 2024 fiscal year, obtaining orders for $8.2 billion in remedies. This marks a record high for the regulatory agency, representing a 67% increase from the previous year’s financial penalties of $4.9 billion.
According to the official press release, the SEC filed 583 enforcement actions during the year, a 23% decline from the previous year. The majority of these enforcement actions (431) were stand-alone cases, with 93 being follow-on administrative proceedings based on civil injunctions, orders, and criminal prosecutions. Additionally, 59 enforcement actions targeted issuers who failed to make their mandatory filings on time.
The surge in financial remedies can be attributed to the SEC’s enforcement actions against crypto entities, particularly Terraform Labs (TFL) and its co-founder Do Kwon. TFL settled charges for $4.5 billion, while Kwon was ordered to pay $200 million in penalties. SEC Chair Gary Gensler emphasized the agency’s commitment to pursuing wrongdoers and protecting investors.
In addition to financial remedies, 2024 was a record year for complaints and reports, with the SEC receiving 45,130 tips, complaints, and referrals – the highest number ever. The agency also issued orders banning 124 individuals from serving as officers or directors of public companies, distributed $345 million to harmed investors, and charged individuals involved in major fraud cases.
Two of the four major fraud cases charged by the SEC in 2024 were related to digital assets. The agency brought charges against individuals involved in the Hyperfund crypto asset pyramid scheme and NovaTech Ltd, a multilevel marketing and crypto scheme. The SEC highlighted the risks posed by emerging technologies, noting instances where bad actors used artificial intelligence and fake crypto platforms to defraud victims.
Despite the substantial financial remedies obtained from Terraform Labs, the SEC is unlikely to recover the $4.5 billion judgment as the company is bankrupt. Terra mainnet services have been shut down, and retail investors who suffered losses continue to seek a community-led revival.
Overall, the SEC’s achievements in 2024 underscore its dedication to upholding market integrity and protecting investors. The agency’s proactive enforcement actions against fraudulent activities, particularly in the crypto space, demonstrate its commitment to maintaining a fair and transparent financial ecosystem.