DOWNLOAD: 2024 Enforcement Report
WASHINGTON, D.C. (October 22, 2024) – The North American Securities Administrators Association (NASAA) today released its 2024 Enforcement Report, revealing a sharp rise in investigations related to technology and digital assets, alongside a significant increase in public tips and investor complaints. The report also underscores enhanced collaborative efforts with federal agencies, reflecting the evolving landscape of financial crimes and the relentless efforts of state securities regulators to protect investors and maintain market integrity.
NASAA reported that state securities regulators conducted 8,768 active investigations, including 5,155 new and 3,613 ongoing cases, and initiated 1,186 enforcement actions. These actions led to more than $333 million in monetary fines and restitution, and criminal relief of approximately 461 years of incarceration and 227 years of probation and deferred adjudication. The data for the report is collected via a survey of NASAA members and includes responses from 49 of NASAA’s U.S. member jurisdictions. The full report is available here.
According to the report, investigations and enforcement actions taken by state securities regulators are heavily focused on technology and digital assets. Of the new investigations opened in 2023, 343 cases involved digital assets other than staking and non-fungible tokens (NFTs), 144 involved staking, and 205 cases involved social media fraud. The number of these cases reported in 2023 increased significantly from 2022.
In 2023, state securities regulators reported receiving 7,914 tips and complaints, a significant increase from the numbers reported in 2022 and 2021. They also received 1,467 referrals from other agencies. The largest source of these referrals (608) came from the U.S. Securities and Exchange Commission (SEC) or Financial Industry Regulatory Authority (FINRA).
“Fraudsters often exploit the buzz that comes with innovation and technology to take advantage of investors. Combine that with the many ways in which technology and social media link us together and bad actors find significant opportunities to try and rip off investors,” said Leslie Van Buskirk, NASAA President and Administrator, Division of Securities, Wisconsin Department of Financial Institutions. “The 2024 Enforcement Report underscores how state securities regulators are fighting the bad actors and the vital role they play in safeguarding investors and upholding market integrity.” Van Buskirk added.
“This report reflects NASAA members’ long-standing commitment to stopping investment scams and getting justice for victims,” said NASAA Enforcement Section Committee Co- Chair Amanda Senn, Alabama Securities Director. “I appreciate the willingness of NASAA members to provide this information and to Enforcement Section Vice-chair Joe Rotunda, Director of Enforcement of the Texas State Securities Board and the members of the Enforcement Publications and Manuals Project Group for compiling the report.”
The report also highlights state securities regulators’ prioritization of protecting older investors. In 2023, they opened 1,305 investigations and filed 131 enforcement actions involving 2,869 older investors. In 2023, the top issues in investigations involving senior victims were internet and social media scams, and digital assets other than non-fungible tokens (NFTs) or staking.
The report reflects that state enforcement activity included actions involving traditional investment products and registered persons. Within the licensed securities industry, regulators reported opening investigations of registered parties, including broker-dealers (204), agents (184), investment advisers (404), and investment adviser representatives (190). Regulators also investigated 355 unregistered firms and 611 unregistered individuals. These investigations resulted in 103 enforcement actions involving broker dealers, 42 involving agents, 113 involving investment advisers, and 142 involving investment adviser representatives. Collectively, the states revoked 31 individuals’ licenses and 21 firms’ licenses and barred 72 individuals and 14 firms from the industry.
State regulators also suspended the licenses of 23 individuals and 10 firms and denied over 400 license applications. In 2023, over 5,000 applications for licensure were withdrawn before state agencies determined whether denial, suspension, or revocation of licenses were warranted.
– NASAA–
About NASAA:
Organized in 1919, the North American Securities Administrators Association (NASAA) is the oldest international organization devoted to investor protection. NASAA is a voluntary association whose membership consists of the securities regulators in the 50 states, the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, the 13 provincial and territorial securities regulators in Canada, and the securities regulator in México. For more information, visit www.nasaa.org.
For More Information:
Fred Baldassaro, Director of Communications
fbaldassaro@nasaa.org | 202-737-0900
Karen Grajales, Manager, Communications and Investor Outreach
kgrajales@nasaa.org | 202-737-0900
