Analysis

The Securities Enforcement Empirical Database (SEED) currently provides data for SEC actions initiated against public companies traded on major U.S. exchanges and their subsidiaries. We define public companies as companies with security prices that are tracked by the Center for Research in Security Prices.

The SEC filed 68 new enforcement actions against public companies and subsidiaries in FY 2022, an increase of 28% from FY 2021.

The figure illustrates the number of SEC actions against public companies and subsidiaries in each fiscal year 2013 to 2022.

See color accessible chart. See full text description. 

SEED tracks the type of allegation the SEC makes in each enforcement proceeding. In FY 2022, Issuer Reporting and Disclosure allegations were the most common allegation type (38 percent) of all actions filed against public companies and subsidiaries. Broker Dealer allegations were the second most common action, accounting for nearly one-quarter of the actions filed. Eleven out of sixteen Broker Dealer actions were part of the SEC’s group of actions filed against financial institutions for recordkeeping failures.

 

The figure contains a heat map of the percentages of SEC actions against public companies and subsidiaries for each allegation type from fiscal year 2013 to fiscal year 2022. See color accessible chart. See full text description.

See color accessible chart. See full text description.

In FY 2022, the SEC continued to bring the majority of the public company and subsidiary actions in federal court (88 percent).

The figure illustrates the percentages of civil actions and administrative proceedings against public companies and subsidiaries for each fiscal year 2013 to 2022.

See color accessible chart. See full text description. 

In FY 2022, the SEC noted cooperation by 63% of public company and subsidiary defendants, consistent with the historical average of 62 percent from FY 2017 to FY 2021.

The figure illustrates, for each fiscal year from 2013 to 2022, the percentages of SEC actions against public companies and subsidiaries that noted: cooperation and monetary settlement; cooperation and no monetary settlement; no cooperation and monetary settlement; no cooperation and no monetary settlement.

See color accessible chart. See full text description.

Monetary settlements in public company and subsidiary actions totaled $2.8 billion in FY 2022, $0.9 billion more than in FY 2021. The median monetary settlement increased to $9 million in FY 2022, the highest median monetary settlement in SEED.

The figure illustrates the average monetary settlement and the median monetary settlement in each fiscal year 2013 to 2022.

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Disgorgement and prejudgment interest, as a percentage of total monetary settlements imposed in public company and subsidiary actions, declined to 18 percent in FY 2022, the lowest percentage in any fiscal year in SEED.

The figure illustrates the percentages of civil penalties and other monetary settlements vs. disgorgement and prejudgment interest against public companies and subsidiaries for each fiscal year 2013 to 2022.

See color accessible chart. See full text description.

SEED also includes data on admissions of guilt. SEED considers a defendant to have an admission of guilt if the admission is in the SEC action, as opposed to a parallel action. In FY 2022, there were 16 public company or subsidiary defendants with admissions of guilt, the highest in any fiscal year in SEED.  Fifteen of the 16 public company and subsidiary defendants with admissions of guilt were in actions announced on September 27, 2022, in which defendants admitted to recordkeeping failures. The other defendant with an admission of guilt was also in an action involving Broker Dealer allegations and recordkeeping failures.

The figure illustrates the number of public company and subsidiary defendants that settled with an admission of guilt, settled with neither admitting nor denying the allegations, and settled without either of those specific phrases regarding the allegations for each fiscal year 2013 to 2022.

See color accessible chart. See full text description.