The Division reported that it brought a total of 862 enforcement actions in 2019, up from 821 in the previous year and the highest number since 2016. The volume of standalone enforcement actions also rose, from 490 in 2018 to 526 in 2019. This 7 percent year-over-year increase in actions, though small, is notable in light of this year’s month long government shutdown and the Commission’s hiring freeze, which extended through the first half of fiscal year 2019.
The Division achieved its 2019 results in significant part because of the Mutual Fund Share Class Selection Disclosure Initiative. The initiative encouraged investment advisers to self-report certain violations of the Investment Advisers Act (Advisers Act) relating to the selection of mutual fund share classes paying Rule 12b-1 fees. During the fiscal year, the Commission brought cases against 95 firms that had self-reported as part of that initiative, and these firms were ordered to return a total of over $135 million to affected retail investors. Largely as a result of the initiative, 191 of the agency’s 526 cases in fiscal 2019 were against investment advisers and investment companies (36 percent of the total, up from 22 percent of cases in fiscal 2018 — in both years the largest single category of cases).
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