November 17, 2022

SEC Enforcement Actions Against Public Companies: A New Study

Following up on the SEC’s report on fiscal 2022 enforcement activity that I blogged about yesterday, the NYU Pollack Center for Law & Business and Cornerstone Research published a report examining the SEC’s enforcement actions against public companies and subsidiaries during fiscal year 2022.

The report notes that the SEC filed 68 enforcement actions against public companies and subsidiaries in the fiscal 2022, with aggregate monetary reaching $2.8 billion. The 68 enforcement actions in fiscal 2022 represented a 28% increase over fiscal 2021. Issuer Reporting and Disclosure continued to be the most common allegation type in fiscal 2022, accounting for 38% of actions.

The press release announcing the new report noted the following highlights:

– Despite ongoing challenges to the constitutionality of the SEC’s use of administrative law judges, the SEC continued to bring most of its actions (88%) as administrative proceedings in FY 2022.
– Five actions were litigated actions, more than the average of three over the prior five fiscal years and consistent with Chair Gensler’s statement that more cases will be litigated as the SEC increasingly holds wrongdoers accountable.
– The SEC filed four actions against public companies and subsidiaries related to environmental, social, and governance issues.
– In FY 2022, 18% of total monetary settlements came from disgorgement and prejudgment interest, the lowest percentage in SEED. The remaining 82% came from civil and other penalties.
– Only 1% of public company and subsidiary defendants settled without cooperation noted and without a monetary component, the lowest percentage in any fiscal year in SEED.

– Dave Lynn