The Securities and Exchange Commission or SEC has set a new record in financial penalties, with a significant portion resulting from a settlement with Terraform Labs.
What Happened: The regulator has gathered $8.2 billion in monetary penalties for the fiscal year 2024, marking the highest amount in the agency’s history.
This figure represents a 67% increase from the $4.9 billion collected in fiscal year 2023.
Despite the record penalty collection, the SEC saw a 26% decline in enforcement actions during the year, with 583 actions taken.
The regulator also barred 124 individuals from serving as officers and directors of public companies, marking the second-highest number in a decade.
Moreover, the SEC returned $345 million to investors who had been impacted, bringing the total amount returned since fiscal year 2021 to over $2.7 billion.
The agency also processed 45,130 tips, complaints, and referrals during the year — a record high — including over 24,000 whistleblower submissions.
Notably, more than 14,000 of those submissions came from just two individuals. The regulator has awarded whistleblowers a total of $255 million.
Why It Matters: The SEC has been cracking down on companies for misleading public disclosures related to cybersecurity risks and breaches.
The record-breaking total was largely influenced by a significant monetary judgment against cryptocurrency company Terraform Labs and its former CEO Do Kwon, following a successful SEC jury trial.
The case was one of the largest securities frauds in U.S. history.
Another notable financial penalty was a $249 million settlement with Morgan Stanley, resolving SEC charges related to the disclosure of confidential information about large stock sales.
In October, the regulator also charged four major companies over the SolarWinds hacks, issuing millions in penalties.
Earlier this month, JPMorgan Chase & Co. also agreed to pay investors $151 million following SEC charges for various law violations.
The stringent regulatory approach, particularly towards cryptocurrencies, has been a hallmark of SEC Chair Gary Gensler’s tenure, who announced that he will step down in January.
During his tenure, the SEC pursued several enforcement actions against prominent cryptocurrency firms, including filing lawsuits against Coinbase and Binance for allegedly running unregistered securities exchanges.
In July, President-elect Donald Trump had stated, "I will fire Gary Gensler on day one." His statement was an indication of a possible change in the SEC's stance on digital assets with the new administration.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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