Off-channel communications continues as an enforcement priority, driving Broker Dealer allegations to 29% of FY 2024 actions.
The U.S. Securities and Exchange Commission (SEC) initiated 80 enforcement actions against public companies and subsidiaries in fiscal year 2024, marking a 12% decline from FY 2023 but still up nearly 5% compared to the nine-year historical average, according to a report released today by Cornerstone Research and the NYU Pollack Center for Law & Business. Meanwhile, total monetary settlements grew to $1.5 billion in FY 2024, up from $1.3 billion the previous year, although still below the $1.8 billion average observed between FY 2015 and FY 2023.
The report, SEC Enforcement Activity: Public Companies and Subsidiaries—Fiscal Year 2024 Update, analyzes information from the Securities Enforcement Empirical Database (SEED). This year’s report is also available in a new, interactive format that enables readers to better engage with the data.
The SEC’s FY 2024 enforcement actions reveal a focus on trends like off-channel communications and whistleblower protection.
The SEC’s FY 2024 enforcement priorities were evident in the 38 actions that were part of five sweeps. Most prominent was the sweep of recordkeeping failures stemming from companies’ use of off-channel communications (22 actions). This led to an increase in actions with Broker Dealer allegations, with such actions jumping to 29% of all FY 2024 actions compared with 19% during the previous fiscal year. The SEC also brought seven actions for violations of the whistleblower protection rule in FY 2024, up from three in FY 2023.
“The SEC’s FY 2024 enforcement actions reveal a focus on trends like off-channel communications and whistleblower protection,” said Stephen Choi, a report coauthor and the Bernard Petrie Professor of Law and Business at New York University School of Law and Co-Director of the NYU Pollack Center for Law & Business. “We also saw a focus on cooperation and non-monetary settlements, as the agency prioritized efficiency and cooperation in its enforcement approach.”
SEC officials have emphasized that admissions of guilt are a powerful accountability measure.
“SEC officials have emphasized that admissions of guilt are a powerful accountability measure,” added Sara Gilley, a report coauthor and cohead of the Cornerstone Research securities litigation practice. “Former Director of the SEC’s Division of Enforcement Gurbir Grewal indicated that the SEC brought more cases involving admissions of guilt than in prior years to enhance accountability. Our report’s findings underscore these comments.”
The average monetary settlement for defendants in FY 2024 was $19.8 million—higher than the average of $15 million in FY 2023 but lower than the FY 2015–FY 2023 average of $24.7 million. Cooperation was up in FY 2024, with 75% of public company and subsidiary defendants in settled actions having cooperation noted by the SEC, and a record 34 had admissions of guilt. The 75% included 5% who had cooperation noted but did not pay a monetary settlement.