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 91 new enforcement actions against public companies and subsidiaries in FY 2023, an increase of 34 percent from FY 2022. 

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SEED tracks the type of allegation the SEC makes in each enforcement proceeding. In FY 2023, Issuer Reporting and Disclosure allegations were the most common allegation type (45 percent) of all actions filed against public companies and subsidiaries.  Broker Dealer allegations were the second most common action, accounting for 19 percent of the actions filed.  Fourteen of these new actions were filed as part of the SEC’s sweep of broker-dealers and other entities for recordkeeping failures, continuing a trend from FY 2022.

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In FY 2023, the SEC noted cooperation by 69 percent of public company and subsidiary defendants, the third highest of any fiscal year in SEED. Of the cooperating defendants that settled, 13% had no monetary settlements imposed.

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Monetary settlements in public company and subsidiary actions totaled $1.3 billion in FY 2023, $1.5 billion less than in FY 2022. The median monetary settlement decreased to $4 million in FY 2023, which is consistent with the average median for FY 2014–FY 2022.

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Disgorgement and prejudgment interest, as a percentage of total monetary settlements imposed in public company and subsidiary actions, increased to 41 percent in FY 2023, yet remained lower than the FY 2014–FY 2022 average of 52 percent.

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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 2023, there were 16 public company or subsidiary defendants with admissions of guilt, matching the record-high total number of admissions in FY 2022. Fifteen of the sixteen public company and subsidiary defendants with admissions of guilt were facing Broker Dealer allegations.

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