Enforcement Action
A formal regulatory proceeding brought against a firm or individual for alleged violations of securities laws or regulations.
What is Enforcement Action?
An enforcement action is a formal regulatory proceeding initiated by a government agency—such as the SEC, FINRA, CFTC, OCC, or Federal Reserve—against a financial institution, firm, or individual for alleged violations of applicable laws or regulations. Enforcement actions can result in a range of remedies including monetary penalties, disgorgement of profits, cease-and-desist orders, suspension or revocation of licenses, industry bars, and referrals for criminal prosecution. The SEC's Division of Enforcement handles securities law violations, while FINRA conducts enforcement against its member broker-dealers and registered representatives.
Example
In 2022, the SEC brought enforcement actions against 16 Wall Street firms including Goldman Sachs, Morgan Stanley, and Bank of America, alleging widespread use of personal messaging apps (WhatsApp) for business communications in violation of federal record-keeping requirements. The firms collectively paid over $1.8 billion in penalties.
Source: SEC — Enforcement Actions