SEC enforcement activity against public company and subsidiary defendants increased in FY 2022 to 68 actions. The first full fiscal year of Chair Gensler’s tenure also saw total monetary settlements imposed by the SEC in public company and subsidiary actions climb to $2.8 billion. Monetary settlements were imposed on 97% of settling defendants. Both the total dollar amount and the percentage were the largest of any fiscal year in SEED.

Key Trends

Broker Dealer actions filed against public companies and subsidiaries in FY 2022 increased to 16 from three in FY 2021. The majority of defendants (76%) in these 16 actions had admissions of guilt.

Broker Dealer Actions

• The number of enforcement actions against public companies and subsidiaries with Broker Dealer allegations increased to 16, representing 24% of the 68 total actions in FY 2022. Both the number and share are the highest since FY 2018.

• The increase in Broker Dealer actions was driven in part by actions brought by the SEC on September 27, 2022, related to “widespread recordkeeping failures,” in which the SEC imposed more than $1.1 billion in monetary settlements. The SEC also obtained admissions of guilt from all defendants involved in these actions.[i]

• Public company and subsidiary actions with Broker Dealer allegations in FY 2022 (including the 10 in SEED filed on September 27) had a substantially higher median total monetary settlement ($125 million) than other types of actions in FY 2022 ($6 million).

• The 16 admissions of guilt by public companies or subsidiaries in FY 2022 were all in Broker Dealer actions. The previous highest number of admissions of guilt in Broker Dealer actions in a fiscal year was seven.

Monetary Settlements

• Total monetary settlements in actions against public companies and subsidiaries increased to $2.8 billion in FY 2022, the largest total in any fiscal year in SEED.

• The large monetary settlement total in public company and subsidiary actions is consistent with the record $6.4 billion of total monetary settlements imposed by the SEC for all actions (not just public company and subsidiary actions) in FY 2022.[ii]

EPS, COVID-19, and ESG-Related Actions

• The SEC filed its fourth action against public companies and subsidiaries under its Earnings Per Share (EPS) Initiative in FY 2022. This action involved Issuer Reporting and Disclosure allegations, similar to the three EPS Initiative actions filed prior to FY 2022.

• FY 2022 included the second COVID-19-related action in SEED, filed against a public company with Securities Offering allegations.

• The SEC filed four actions against public companies and subsidiaries related to ESG in FY 2022.