With an eye toward protecting investors and markets, the Securities and Exchange Commission filed more than 780 enforcement actions and obtained judgments and orders totaling $5 billion in fiscal year 2023, Chair Gary Gensler said Oct. 25.
In the previous fiscal year, the agency posted a record $6.4 billion in penalties and disgorgement and filed 760 enforcement actions. The agency's enforcement division typically posts its complete fiscal year report in November.
In a speech at the Securities Enforcement Forum in Washington, Gensler highlighted some of the SEC's major enforcement highlights, including settling record keeping-related charges with 23 firms and bringing cases against companies that used employee exit agreements to impede an employee's ability to file whistleblower complaints.
Gensler also took aim at the crypto industry and said the field is "rife with fraud, scams, bankruptcies and money laundering. While many entities in this space claim they operate beyond the reach of regulations issued before Satoshi Nakamoto's famous white paper, they also are quick to seek the protections of the law, in bankruptcy court and litigating their private disputes."
Crypto stakeholders have criticized the SEC under Gensler for pursuing regulation by enforcement, though during a question-and-answer period, the chair disagreed with that claim.
"We want to work with folks to get into compliance, but it also starts with whether that crypto intermediary or crypto securities asset provider wants to come into compliance," he said.
During his prepared remarks, Gensler referenced the regulation by enforcement criticism in the broader context of the SEC's enforcement actions. But while some see it that way, Gensler said the agency is simply "enforcing the laws and the regulations that are on the books."
To that end, the SEC will follow the facts wherever the lead, he added. "Whether it's to close a case or, where appropriate, to go into court," Gensler said. "We are not afraid to litigate matters, whether against the best-resourced founders, the oldest firms in this counties, the newest industries, and yes, the largest crypto exchanges."
Separately, when asked for his thoughts on a case challenging the constitutionality of the SEC's administrative law judges, or ALJs, which handle administrative enforcement cases in-house, Gensler declined comment. The U.S. Supreme Court on Nov. 29 will hear oral arguments in the case, Jarkesy vs. SEC, which could hinder the SEC's enforcement apparatus, according to experts.
