697 companies hit with SEC violations in FY 21
As a result of the actions, companies paid just under $2.4 billion in disgorgement and a record $1.4 billion in penalties
|Wednesday, November 24, 2021|
For the first time in a decade, not a single public company charged in an enforcement action pleaded guilty, according to an analysis by Cornerstone Research and New York University’s Pollack Center for Law & Business.
Stephen Choi, who helped lead the research, said companies might plead guilty more frequently going forward because of changes the SEC announced in October to its so-called no-admit, no-deny policy. Under the changes, the SEC will rely less on settlements in which companies neither admit nor deny guilt.
“It will be interesting to see if this trend changes," said Choi, "as the SEC [seeks] admissions in certain cases as a way to improve the deterrent value of enforcement actions.”
Critics have called no-admit, no-deny a kind of gag rule that should be abolished.
In its report, the SEC highlighted some of the enforcement actions it took during the fiscal year. The penalized companies include a number of big names:
The report also called out executives for their role in causing their company's violations. Among them were the former CEO and chairman of Wells Fargo and the former head of Wells Fargo’s community bank; the founder and former CEO of alternative fuel truck manufacturing company Nikola; the former CEO and CFO of WageWorks; and the former CEO and CFO of FTE Networks.
The SEC also highlighted actions it took against auditors, the watchdogs whose job is to help companies comply with accounting and reporting requirements. Among its actions, the agency –
Access SEC enforcement statistics.