State securities regulators received 7,914 tips and complaints in 2023, up 14% from 2022 and 19% from 2021, according to the annual enforcement report released by the Securities Administrators Association of North America.
Other agencies referred 1,467 cases to states, 608 of which came from the Securities and Exchange Commission or the Financial Industry Regulatory Authority, a 40% increase from last year.
Overall, states investigated 8,768 cases, which resulted in 1,186 enforcement actions, including 121 criminal actions, 102 civil actions, and 909 administrative actions. This compares to 8,538 cases and 1,163 enforcement actions in 2022.
However, states did not provide as much in restitution and fines as last year, reporting $208 million in restitution and more than $124 million in fines in 2023. That was down from $702 million in restitution and more than $223 million dollars in fines in 2022. Members reported 5,531 months of prison sentences and 2,723 months of probation and deferred adjudication.
State investigations into digital asset schemes have been on the rise over the past several years, and this continued to be a focus in 2023. Digital assets topped the lists of the most cited products in both investigations and enforcement actions. Excluding stocks and fiat tokens, digital assets accounted for 343 of the new investigations reported in 2023. In 2022, state regulators opened 357 investigations involving digital assets and 125 enforcement actions.
“As bad actors increase their use of social media and digital assets move into the mainstream, state securities administrators are stepping up their efforts to alert the public to these scams and encourage victims to report them, ” says the NASAA report.
States reported 205 investigations involving the use of social media and the Internet, a 19% increase from 172 reported in 2022. They had 73 enforcement actions surrounding social media fraud, up 12% from 2022.