There’s no question that complying with regulations costs money. In addition to personnel expenses that come with hiring and retaining qualified compliance professionals, firms also incur expenses related to establishing, implementing, enforcing, and testing policies and procedures, as well as leveraging the right technology to help scale up processes. However, as the 2020 SEC enforcement statistics show, the cost of non-compliance is significantly greater.
Despite the challenges of COVID-19, the SEC still brought more than 700 enforcement cases during FY 2020. While the number of cases the Commission filed was fewer than 2019, the financial remedies ordered set a new high. Additionally, the number and amount of whistleblower awards exceeded prior years. Awards issued in 2020 accounted for roughly 37% of the total number of individuals awarded over the entire life of the whistleblower program.
Overall, the SEC brought 715 enforcement actions in FY 2020, 405 of which were standalone actions. Seventy-two percent of those standalone cases included charges against one or more individuals. In addition, the Commission obtained judgments and orders totaling approximately $4.68 billion in disgorgement and penalties – the highest amount on record.
As a result of its efforts, the SEC barred or suspended 477 wrongdoers and suspended trading in securities of 196 issuers. Additionally, the Division triaged approximately 23,650 tips, complaints, and referrals and opened 1,200 new inquiries and investigations. The Commission also distributed more than $600 million to harmed investors.
The SEC enforcement statistics are clear: Your firm cannot afford the cost of non-compliance. Your team must be proactive and innovative with strategies to stay ahead of risk. Download our 2021 CCO Playbook to access the latest resources, and for an in-depth look at specific SEC enforcement actions in 2020, view the complete annual report, and read the SEC’s 2021 examination priorities here.
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