2023 SEC Enforcement Results – Takeaways for Fund Managers


On November 14, 2023, the SEC’s Division of Enforcement announced its Enforcement Results for Fiscal Year 2023.  Below are some key takeaways for fund managers:

Enforcement Actions Filed in Fiscal Years 2018 to 2023

 FY 2023FY 2022FY 2021FY 2020FY 2019FY 2018
Disgorgement and Penalties Ordered (in billions)$4.949$6.44$3.80$4.68$4.35$3.95
Total Actions784760697715862821
% of Total Actions Involving Investment Advisers / Investment Companies18%23%23%

19%

 

29%21%

These results demonstrate an SEC that has been active on the enforcement front.  The SEC’s Enforcement Director noted earlier this year that private funds were a “substantive priority area” for the division, specifically noting concerns about potential conflicts of interest and fee and expense issues.  Moreover, in over the past two years the SEC has pushed an aggressive slate of rulemaking affecting the private funds industry that impose new restrictions and arm regulators with additional tools to identify, exam and investigate market practices.  As 2024 begins, we expect to see more scrutiny of private fund managers, as the SEC takes steps to enforce the new rules and the principles it has espoused in its rulemaking—for example, focused on fiduciary obligations of private fund managers.


© 2024 Proskauer Rose LLP.
National Law Review, Volumess XIII, Number 324