Dive Brief:
- The number of enforcement actions brought by the Securities and Exchange Commission against public companies fell 30% year-over-year in fiscal 2025, according to a report issued this week by the NYU Pollack Center for Law & Business and Cornerstone Research, an economic consulting firm.
- Most (93%) of the 56 total actions in the annual period ended Sept. 30 came during former SEC Chair Gary Gensler’s tenure, with four taking place after his departure in January, when President Donald Trump took office to begin his second term and his administration appointed Mark Uyeda to serve as acting chair until April, when current SEC Chair Paul Atkins was sworn in, according to the report.
- While the decline tracks similar drops during years of SEC administration changes, the numbers during the year period notched both the highest and lowest totals, respectively, for outgoing and income chairs since 2013. “The big message here is the number of enforcement actions after Chair Atkins came on board are much lower than in prior transitions,” Stephen Choi, a co-author of the report and an NYU Law Professor said in an interview. “We’ll have to wait and see if it’s a transition issue or more of a permanent trend.”
Dive Insight:
Even before Trump took office many securities lawyers and former SEC staffers expected that an Atkins-led SEC would lead to more targeted enforcement and softer, more collaborative rulemaking, CFO Dive reported.
But Choi said parsing the data based on just a partial year’s data under the new administration is akin to “reading tea leaves.” A clearer picture with regards to the true enforcement policy under Atkins will emerge once there is data from actions taken after he has held the reins for a full fiscal year.
There are a few potential causes of the decline in enforcement, Choi said. The transition might have been particularly disruptive and the pipeline of enforcements might have been dried out due to the surge of cases brought under Gensler. “Then there’s of course the third possibility that enforcement is not Atkin’s priority,” Choi said. “It’s hard to know.”
The report also found the total value of the monetary settlements dropped 45% YOY to $808 million in fiscal 2025, the lowest in more than a decade.
The four enforcement actions Atkins oversaw were related to issuer reporting and disclosure weaknesses, according to the report. In contrast, Gensler initiated nine actions in January of 2025 that were part of a focus on “off-channel” communications at financial firms.
An SEC spokesperson declined to comment.