SEC Has Written Off Nearly $10 Billion in Penalties Over Past 10 Years

SEC Writes Off $10 Billion in Fines It Wasn’t Able to Collect

Paul Bilzerian has been on the run from the Securities and Exchange Commission for so long that he now owes the agency $180 million with interest—almost three times what a court initially ordered him to pay.

For 31 years, the agency has tried and failed to collect a $62 million judgment against the former corporate raider for securities fraud. To avoid paying the penalty, Bilzerian pleaded poverty and twice declared bankruptcy. He later moved to the island nation of St. Kitts and Nevis, beyond the reach of the U.S. government.[…]

The case is emblematic of the commission’s long struggle to enforce its judgments against individuals who go to great lengths to avoid paying them. And in other circumstances, the SEC publicizes penalties that it will never collect because defendants can receive waivers if they make payments in related criminal or overseas cases. Those two dynamics mean the SEC typically brings in less money than is apparent.

In 2023, the commission touted court orders or settlements representing $4.9 billion in financial sanctions. But it also wrote off $1.4 billion in penalties levied in prior years, according to data obtained by the Journal.

Over the past 10 years, the SEC has written off almost $10 billion in penalties, according to the data, which the Journal obtained under the Freedom of Information Act.

Crypto industry dreams of a golden era under Trump

Now that the money has been spent and the politicians elected, crypto executives are turning their attention to getting the actions they want in place.

“The industry has paid a lot of people a lot of money and is going to expect to see the receipts,” says Hilary Allen, professor at the American University Washington College of Law.

Top of the wish list is a friendlier SEC. The nomination of Atkins was celebrated by the crypto industry, which sees him as more understanding and open to creating digital asset rules.

“He definitely gets the industry,” says Carlos Domingos, chief executive of Securitize, who has worked with Atkins since 2019. “Paul has been an advocate of streamlining regulation…. [he is] a person that listens and takes decisions based on feedback and [doesn’t have] this animosity towards the industry.”

Domingos says that the mood has already changed within the SEC. After meeting a few commissioners in December, “the tone is very, very different, it’s about, ‘Tell us what your problems are’, ‘how can we fix those problems?’”

’Most important man in accounting’ warns against lowering standards

With young people lured by the higher salaries and lower entry requirements of finance and technology, the number of people taking the CPA exam run by the institute has fallen sharply, and accounting firms have demanded reforms to make it cheaper and quicker to get qualified.

In a wide-ranging interview with the Financial Times, Melancon expressed scepticism about some of the firms’ claims, and said a race to the “lowest common denominator” could come back to haunt the profession.

“We are a highly trusted profession and we live in a world that doesn’t have a lot of touchstones on trust,” he said. “We need to respect the respect that we get from the public and from the business community and from regulators.”

Fifth Circuit Still Has Path to Hear Big Cases in Trump Era

The Fifth Circuit won’t miss out on all major litigation during the next four years, even as the conservative appeals court is expected to lose its status as a go-to spot to challenge federal policies during Donald Trump’s upcoming presidential term.

The New Orleans-based appeals court heard major federal challenges during the first Trump administration. It struck down the Affordable Care Act in a ruling later overturned by the Supreme Court, and found that the structure of the Federal Housing Finance Agency was unconstitutional.

Corporate DEI Programs Recoil and Rebrand as Pressure Mounts

Five trends emerged in 2024 that are likely to continue: conservative influencer Robby Starbuck, emboldened by success, expects to target more companies to dismantle their diversity, equity and inclusion initiatives; companies have increasingly been changing the ways they talk about DEI to avoid political conflict; conservative forces in Washington have set their sights on corporate and government DEI programs; legal groups challenging diversity programs will persist; and more companies are expected to flag DEI as a risk.

But it’s complicated: while it may look like corporate diversity efforts are drawing to an end, most companies appear to be forging ahead with the majority of their diversity policies and goals—albeit more quietly, so as not to draw adverse attention. Meanwhile, many businesses and executives still publicly stand behind their diversity efforts.