SEC Writes Off $10 Billion in Fines It Can't Collect

Paul Bilzerian has been on the run from the Securities and Exchange Commission for so long that he now owes the agency $180 million with interest—almost three times what a court initially ordered him to pay.

- Dave Michaels

For 31 years, the agency has tried and failed to collect a $62 million judgment against the former corporate raider for securities fraud. To avoid paying the penalty, Bilzerian pleaded poverty and twice declared bankruptcy. He later moved to the island nation of St. Kitts and Nevis, beyond the reach of the U.S. government.

The financier told The Wall Street Journal in 2014 that he "would rather starve to death than earn a dollar to feed myself and pay the government a penny of it." So far, he has mostly succeeded.

This fall, federal prosecutors charged Bilzerian, 74 years old, with new crimes they say he committed with millions of dollars he had hidden from the SEC. He hasn't answered the charges, and declined to comment.

The case is emblematic of the commission's long struggle to enforce its judgments against individuals who go to great lengths to avoid paying them. And in other circumstances, the SEC publicizes penalties that it will never collect because defendants can receive waivers if they make payments in related criminal or overseas cases. Those two dynamics mean the SEC typically brings in less money than it appears.

In 2023, the commission touted court orders or settlements representing $4.9 billion in financial sanctions. But it also wrote off $1.4 billion in penalties levied in prior years, according to data obtained by the Journal.

Over the past 10 years, the SEC has written off almost $10 billion in penalties, according to the data, which the Journal obtained under the Freedom of Information Act.

"If we are going to advertise the numbers that we are imposing, we ought to be transparent about the fact that does not mean that money is flowing to the government and to investors," said Commissioner Hester Peirce, a Republican member of the SEC.