The number of Securities and Exchange Commission enforcement actions brought against public companies and subsidiaries dipped in fiscal year 2024, but was still above the nine-year average, according to a report issued by Cornerstone Research and the New York University Pollack Center for Law & Business.
The SEC initiated 80 enforcement actions against public companies and subsidiaries in the fiscal year ended Sept. 30, down from 91 actions the previous year, according to the Nov. 21 report. Over the last nine fiscal years, the average was 76.
Also, total monetary settlements grew to $1.5 billion in FY 2024, up from $1.3 billion the previous year, but below the $1.8 billion average observed between FY 2015 and FY 2023, the report found.
Thirty-eight of the initiated enforcement actions were part of five sweeps. Most prominent was the sweep of record-keeping failures stemming from companies’ use of off-channel communications (22 actions), according to the report.
Some stakeholders have criticized the SEC for holding firms to an expectation of perfection with respect to off-channel communication policies. But earlier this month, Sanjay Wadhwa, the SEC’s enforcement division’s acting director, defended the initiative.
“Compliance with those requirements is essential to investor protection and well-functioning markets; conversely noncompliance thwarts effective oversight of the industry, harming investors,” Wadhwa said.
Separately, 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, according to the report.
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 report found. Of the companies and subsidiaries that cooperated, 5% did not pay a monetary settlement.
