Photo credit: Tierney L. Cross/Bloomberg

The US Securities and Exchange Commission (SEC) reported a record $8.2 billion in financial remedies for fiscal year 2024, despite a 26% decrease in total enforcement actions compared to the previous year.

The SEC's Division of Enforcement addressed emerging threats, including misstatements related to artificial intelligence and fraud schemes leveraging social media. The agency also maintained its focus on traditional investor risks such as material misstatements, deficient internal controls, and significant gatekeeper failures.

The SEC received 45,130 tips, complaints, and referrals in fiscal year 2024, the highest number ever recorded in a single year. This included over 24,000 whistleblower tips, more than 14,000 of which were submitted by two individuals. The SEC issued whistleblower awards totaling $255 million during this period.

A significant portion of these financial remedies stemmed from the SEC's legal victory against Terraform Labs and its former CEO, Do Kwon. The agency secured a $4.5 billion judgment following a unanimous jury verdict, marking one of the largest securities fraud cases in U.S. history.

The SEC also charged 17 individuals in connection with a $300 million Ponzi scheme involving Houston-based CryptoFX LLC. This scheme targeted over 40,000 predominantly Latino investors across ten states and two foreign countries, highlighting the SEC's focus on protecting vulnerable communities from fraudulent crypto asset schemes.

Additionally, the SEC took action against Rari Capital, Inc., a decentralized finance (DeFi) protocol, and its co-founders for misleading investors and engaging in unregistered broker activity. At their peak, Rari Capital's platforms collectively held crypto assets worth more than $1 billion, underscoring the SEC's scrutiny of DeFi platforms operating without proper registration.

The SEC's initiatives included addressing widespread noncompliance with recordkeeping requirements among regulated entities. In fiscal year 2024, the Commission brought recordkeeping cases resulting in more than $600 million in civil penalties against over 70 firms, including the first cases charging recordkeeping violations against municipal advisors.