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SEC Has Stepped Up Enforcement Against Investment Advisers and Brokers

By Alex Padalka November 5, 2018

Despite staff cuts, the SEC has been able to boost the number of enforcement actions it brought in fiscal year in 2018, including stand-alone actions against both investment advisors and brokers, according to the regulator’s latest annual report.

The regulator brought 821 actions in fiscal year 2018, compared to 754 the year prior, all while its enforcement staff numbers shrank from 1,393 to 1,344, the SEC says.

But enforcement in 2018 was still lower than in fiscal year 2016, when the regulator brought 868 actions, according to the report.

The SEC stepped up stand-alone enforcement against investment advisors and investment companies, from 82 last year to 108 in fiscal year 2018, the regulator says.

Stand-alone enforcements against broker-dealers rose from 53 to 63, meanwhile, according to the report.

Actions against investment advisors and companies made up 22% of the stand-alone actions in 2018, up from 18% in 2017, pushing it to second place after actions related to securities offerings, which remain at the top, representing 25% of all actions, the SEC says.

Actions against broker-dealers represented 13% of all enforcement actions in 2018, compared to 12% last year, according to the report.

The SEC continues to focus on what it calls “individual accountability:” 72% of its stand-alone actions were charges against one or more individuals in fiscal year 2018, compared to 73% in the year prior, the regulator says.


Despite the significant increase in the number of enforcements, however, the amount the SEC ordered to be paid in penalties and disgorgement barely rose from $3.789 billion in fiscal year 2017 to $3.945 billion in 2018, according to the report. What’s more, the amount distributed to harmed investors dropped from $1.073 billion in 2017 to $794 million in 2018, the SEC says.