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← Series 79: Section 4
Series 79 practice questionmediumSEC Enforcement Actions

When the SEC brings a civil enforcement action against an investment banker for securities fraud, which of the following remedies can the SEC seek?

  1. ACriminal imprisonment of up to 20 years without a jury trial
  2. BOnly a cease-and-desist order with no monetary penalties
  3. CDisgorgement, civil penalties, and officer/director bar✓ Correct answer
  4. DRevocation of the individual's U.S. citizenship
Explanation

Why C — Disgorgement, civil penalties, and officer/director bar

In civil enforcement actions, the SEC has authority to seek a range of remedies including disgorgement of ill-gotten gains, civil monetary penalties (which can be up to three times the profits gained or losses avoided), injunctive relief, and officer-and-director bars. Criminal imprisonment requires a separate criminal proceeding brought by the Department of Justice, not the SEC directly. The SEC's enforcement arsenal is broad and designed to both punish violators and deter future misconduct.

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