On November 22, the U.S. Securities and Exchange Commission (SEC) announced its enforcement results for the 2024 fiscal year. During FY 2024, the SEC filed 583 total enforcement actions and obtained orders for a record $8.2 billion in financial remedies.
“The Division of Enforcement is a steadfast cop on the beat, following the facts and the law wherever they lead to hold wrongdoers accountable,” said SEC Chair Gary Gensler. “As demonstrated by this year’s results, the Division helps promote the integrity of our capital markets to benefit investors and issuers alike.”
The SEC reports that it received a record 24,000 whistleblower tips and issued whistleblower awards totaling $255 million.
Through the SEC Whistleblower Program, individuals may anonymously report securities violations to the Commission. Qualified whistleblowers, individuals who voluntarily provide original information which leads to a successful enforcement action, are eligible to receive monetary awards of 10-30% of the funds collected in the action.
“Whistleblowers play a valuable role in helping to protect the U.S. financial markets by bringing the Commission information about potential securities law violations,” said Creola Kelly, Chief of the Office of the Whistleblower.
Some of the major enforcement areas highlighted by the SEC include off-channel communications in violation of recordkeeping requirements, non-compliance with the Marketing Rule, failures by entities and individuals to timely report information about their holdings and transactions in public company stock.
The SEC report also highlights its enforcement efforts around emerging technologies and emerging risks, including artificial intelligence, relationship investment scams, cybersecurity and crypto.
Furthermore the SEC highlighted its heightened enforcement efforts around Rule 21F17(a) which prohibits market participants from impeding individuals from blowing the whistle to the Commission. The SEC notes that these actions covered cases “where firms purported to limit customers’ ability to voluntarily contact the SEC or required employees to waive the right to a possible whistleblower monetary award.” It also notes that “the actions included an $18 million civil penalty against J.P. Morgan, the largest penalty on record for a standalone violation of the whistleblower protection rule.”
“The Commission sent a strong message that agreements and conduct that impede communication with the SEC will not be tolerated,” added Kelly.
