Under Chair Gary Gensler and Division of Enforcement Director Gurbir Grewal, who both arrived in 2021, the U.S. Securities and Exchange Commission’s (SEC) enforcement program has been packed with priorities across the financial services industry, including many relevant to investment advisers and funds, as well as their management, employees and boards (together, IAs). This alert will identify: (1) key enforcement statistics, themes and matters for fiscal year 2023 (FY2023)1 of interest to IAs; (2) notable enforcement developments thus far in fiscal year 2024 (FY2024); and (3) what to expect going forward as the Gensler Commission nears the conclusion of its third year.
SEC Enforcement in FY2023
In November 2023, the Division of Enforcement released its results for the 2023 fiscal year (FY2023 Enforcement Results).2 According to the FY2023 Enforcement Results, the SEC:
- Brought 784 enforcement actions in FY2023, a 3% increase over fiscal year 2022 (FY2022).
- Brought 501 actions with substantive charges, an 8% increase from FY2022.
- Brought 86 (of those 501 actions) as substantive or “standalone” matters pursuant to the Investment Advisers Act of 1940 (IAA) and/or Investment Company Act of 1940 (ICA).3
- Filed 62 (of those 86 matters) as settled administrative proceedings, while the remaining 24 were filed in federal court. Of the 24 filed in federal court, 15 are still litigating.
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1 FY2023 is the 12-month period ended September 30, 2023.
2 See press release 2023-234, SEC Announces Enforcement Results for Fiscal Year 2023 (November 14, 2023).
3See Addendum to Division of Enforcement Press Release 2023-234.
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