SEC’s FY 2023 Enforcement Actions Yield $5 Billion in Fines from Wall Street and Crypto Giants
The U.S. Securities and Exchange Commission (SEC), the country’s top regulator of capital markets, has announced it collected $5 billion in fines during the fiscal year (FY) 2023. The funds come from Wall Street firms and crypto giants, both of whom were victims of the SEC’s financial enforcement actions.
The vast majority of the fines (around $3.3 billion) were secured from Wall Street. The main violators were large companies, including Goldman Sachs, Ernst & Young, and JPMorgan Chase. The Commission levied the biggest penalties against the investment banks for misusing investor funds and insider trading violations.
Crypto giants, such as Coinbase and Binance, were issued fines in the range of $50 million and $70 million, respectively. Both companies have been accused of having inadequate anti-money laundering measures and failing to disclose risks associated with their products. A few other high-profile cases include Ripple ($25 million) for failing to register its tokens as securities, and Chainalysis ($2 million) for not disclosing to the SEC that it had received an outside investment.
The SEC’s actions emphasize the importance of compliance in the cryptocurrency sector. Although the agency has gone after firms for misconduct and failure to register properly in some cases, its main emphasis is ensuring respect for the regulations that govern the industry.
The SEC Strictly Adheres to its Regulations
In February 2023, the SEC set a record fine of $900 million on Goldman Sachs Group Inc. and a record settlement of $600 million on Ernst & Young. The fines concluded the Commission’s investigation into Goldman’s role in the 1MDB scandal, which involved billions of dollars fraudulently diverted from a development fund controlled by the Malaysian state.
The Commission did not take it lightly when Goldman carried out its own investigation and failed to inform law enforcement officials and regulators. It ordered Goldman to pay a civil penalty of $2.4 billion and restitution of $895 million as part of its fine.
The SEC also issued several important cease-and-desist orders against certain public companies, insisting that they be honest and transparent in their reports and public statements. The Commission threatened to take action if firms presented inaccurate or misleading information in their disclosures to investors.
Looking Ahead
The SEC’s record fines for FY 2023 demonstrate its commitment to holding Wall Street and crypto giants responsible for their actions. The agency’s enforcement powers extend to pushing for transparency from any firm that holds the public’s money and will take action if they deviate from the set regulations.
The authorities issued a public statement in which they reiterate their commitment to maintaining strong financial markets and protecting investors. The SEC will continue to pursue this mission in the upcoming fiscal year with vigilance and a sense of duty to the country’s capital markets.