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 North American Securities Administrators Association.
Other agencies referred 1,467 cases to the states, 608 of which came from the Securities and Exchange Commission or the Financial Industry Regulatory Authority, up 40% from last year.
Overall, the 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, the states did not secure 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 in fines in 2022. Members reported 5,531 months in prison sentences and 2,723 months of probation and deferred adjudication.
State investigations into digital asset schemes have been on the rise over the last several years, and that continued to be a focus in 2023. Digital assets topped the lists of the most frequently cited products in both investigations and enforcement actions. Excluding staking and non-fungible tokens, digital assets accounted for 343 of the reported new investigations in 2023. In 2022, state regulators opened 357 investigations involving digital assets and 125 enforcement actions.
“As bad actors are increasing their use of social media, and digital assets are moving into the mainstream, state securities administrators are increasing their efforts to warn the public about these scams and are encouraging victims to report them,” the NASAA report said.
The states reported 205 investigations involving the use of social media and the Internet, up 19% from the 172 reported in 2022. They had 73 enforcement actions around social media fraud, up 12% from 2022.
