Key Points
- Significant changes to personnel, structure and operation are underway at the SEC, consistent with sweeping changes at federal agencies more broadly.
- The SEC is likely to prioritize enforcement activity in traditional areas associated with the protection of retail investors and reduce activity in other areas (such as the FCPA).
- The SEC has shifted away from “regulation by enforcement” in the digital asset space, focusing efforts toward the development of a clear regulatory framework.
Paul Atkins was sworn in as chairman of the Securities and Exchange Commission (SEC) on April 21, 2025, but the SEC’s refocus of its priorities began as soon as President Donald Trump assumed office.
Based on steps taken by the commission to date, the SEC appears poised to narrow its enforcement activity and refocus it on the protection of retail investors, consistent with Chair Atkins’ view that the SEC should return to “common sense” in the face of perceived overreaches under the prior administration.
Personnel
Republican Commissioner Mark Uyeda served as acting chair while Atkins awaited Senate confirmation. With Atkins now confirmed, the commission has four members (three Republican and one Democratic); the other Democratic position remains vacant. The acting director of enforcement is Samuel Waldon, former chief counsel for the Division of Enforcement. (See “SEC Moves Quickly To Create a Regulatory Framework for Cryptocurrencies and Reconsider Its Rules and Guidance.”)
Structure and Organization
President Trump has issued numerous executive orders designed to reduce federal agencies’ head count, expenditure and activity. The executive orders suggest the exertion of increased executive authority over the SEC and other independent agencies.
The results of these initiatives are already tangible. Approximately 12% of SEC staff has reportedly taken buyout offers to depart the agency, with future personnel cuts possible. The Department of Government Efficiency (DOGE) is also reportedly working to identify additional spending cuts at the SEC.
Reductions to personnel and resources will require the SEC to prioritize where it focuses its enforcement and examination efforts.
Furthermore, the SEC has reportedly restructured its Enforcement and Examinations Divisions to improve efficiency, management and oversight. Previously, the SEC featured one deputy director for the Enforcement Division and 10 regional directors to whom enforcement and exam personnel, located in various regional offices, reported. Regional directors have now been reassigned; Enforcement staff will now report to one of four deputy directors (three region-based and one supervising the division’s specialized investigative units).
Expected Enforcement Priorities
Eager to depart from the perceived “regulation by enforcement” approach of the prior SEC administration, SEC leadership has affirmed a commitment to enforcement in “core” areas associated with the protection of retail investors.
In the corporate issuer area, we expect this to involve cases related to:
- Accounting and financial disclosure
- Insider trading
- Market manipulation
Enforcement regarding registered entities, meanwhile, is likely to focus on matters related to breaches of fiduciary duties, Regulation Best Interest, SEC Marketing Rule (Rule 206(4)-1 under the Advisers Act) and the safeguarding of customer assets. The SEC also may be more likely to focus on actions that seek accountability for individual wrongdoing.
In contrast, the SEC appears likely to meaningfully reduce enforcement activity in other areas outside these categories, including the Foreign Corrupt Practices Act (consistent with recent Department of Justice policy shifts) and “technical” internal controls violations.
In March 2025, the commission voted to eliminate the policy allowing the delegation of authority to the Division of Enforcement to issue a formal order. This reflects greater commission control over the division and may result in fewer enforcement actions and slower investigations.
The new SEC administration is also more likely to decline to pursue an enforcement action against companies that cooperate with investigations and remediate conduct. SEC leadership has suggested a more measured approach to the imposition of corporate penalties in cases it does pursue, telegraphing a potential return to the 2006 Statement on Penalties issued during Chair Atkins’ prior SEC service.
As a result, the commission is less likely to support corporate penalties for misconduct that did not result in a corporate benefit and will give weight to economic event studies that attempt to isolate any corporate benefit from violations of the law.
Cryptocurrencies and Digital Assets
The SEC has rapidly shifted its approach to cryptocurrencies and digital assets. Under Acting Chair Uyeda, the SEC enacted a coordinated retreat from prominent crypto enforcement actions brought under the previous administration, dismissing, resolving or staying pending litigation (and closing enforcement actions) against various cryptocurrency exchanges, nonfungible token companies and token issuers.
In place, the SEC has instituted the Crypto Task Force, an agencywide initiative headed by Republican Commissioner Hester Peirce that seeks to “develop[] a comprehensive and clear regulatory framework for crypto assets” by “help[ing] the Commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.”
Consistent with this new approach, the SEC has established the Cyber and Emerging Technologies Unit (CETU) within the Division of Enforcement to replace the Crypto Assets and Cyber Unit. The CETU will focus on combating cyber-related misconduct and protecting retail investors from bad actors in the emerging technologies space.
See The Trump Administration’s First 100 Days publication
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