Enforcement Division Releases Report; Fewer Actions in 2020 vs. 2019

The SEC’s Division of Enforcement released its annual report for fiscal year 2020, stating that . 2020 was another successful year for the Division despite the unprecedented challenges posed by the COVID-19 pandemic. “Since mid-March, the entire Division has been working from home, which has created unique impediments to several important aspects of our work, such as taking testimony from live witnesses, gathering evidence, and litigating our cases in court,” the report noted.  Overall, the SEC brought 715 enforcement actions in FY 2020, compared to 862 in 2019 and 821 in 2018.  About 21 percent of the 2020 cases involved investment advisory or investment company issues. Other highlights form the Enforcement Report:

  • From mid-March through the end of the 2020 fiscal year, the Enforcement Division’s Office of Market Intelligence triaged approximately 16,000 tips, complaints, and referrals (a roughly 71% increase over the same time period last year), and the Division opened more than 150 COVID-related inquiries and investigations and recommended several COVID-related fraud actions to the Commission.
  • The Commission issued approximately $175 million in total whistleblower awards to 39 individuals. This represents a 200% increase in number of individuals awarded in a single year over the next-highest year.
  • The Share Class Selection Disclosure Initiative concluded during FY 2020 and resulted in the SEC ordering nearly 100 investment advisory firms that voluntarily self-reported to the Division to return more than $139 million to investors.