Spotlight on Enforcement Task Force Focused on Climate and ESG Issues

The SEC launched the Climate and ESG Task Force within the Division of Enforcement to develop initiatives to proactively identify ESG-related misconduct consistent with increased investor reliance on climate and ESG-related disclosure and investment. The Task Force is led by Sanjay Wadhwa, Deputy Director of the Division of Enforcement.

The Climate and ESG Task Force is coordinating the effective use of Division resources, including through the use of sophisticated data analysis to mine and assess information across registrants, to identify potential violations including material gaps or misstatements in issuers’ disclosure of climate risks under existing rules, and disclosure and compliance issues relating to investment advisers’ and funds’ ESG strategies.

Examples of Enforcement Actions Related to ESG Issues or Statements

For more information concerning types of ESG-related enforcement actions filed to-date, please see the below non-exhaustive list of matters:

• Adviser charged for failing to follow its policies and procedures involving ESG investments
  Goldman Sachs Asset Management (2022)
• International mining company charged with misleading investors
  Compass Minerals International (2022)
• Health insurance distributor and former CEO charged with making false statements to investors
  Health Insurance Innovations (2022)
• Investment adviser charged for misstatements and omissions concerning ESG considerations
  BNY Mellon (2022)
• Brazilian mining company charged with misleading investors
  Vale S.A. (2022)
• Robo-adviser charged with misleading clients
  Wahed Advisers (2022)
• Fraud involving alternative fuel vehicles
  Nikola (2021)
• Sham environmentally-friendly bottling company
  ECO Manufacturing (2021)
• Auto company made misleading statements regarding emissions
  Fiat/Chrysler (2020)
• Offering fraud re: water desalination process
  Bounty of the Ocean (2020)
• EB-5 scheme involving environmentally friendly agriculture and cleaning products production facility
  PDC Capital (2018)
• Sham investment in recycled building panel company
  EnviroBoard (2018)
• EB-5 and offering scheme involving recycling process
  Green Box (2017)
• Pump-and-dump scheme involving revolutionizing O&G production
  Chimera Energy (2014)
• Oil company charged with fraud during Deepwater Horizon spill
  BP (2012)
• Mutual fund manager violated socially responsible investing restrictions
  Pax World Management (2008)