The Securities and Exchange Commission brought 30% fewer enforcement actions against public companies and subsidiaries in fiscal year 2025 compared to the previous year, marking a sharp decline following the change in SEC leadership under President Donald Trump, according to new data from Cornerstone Research and the New York University Pollack Center for Law and Business.
Underscoring the decline in public company enforcement, actions against investment advisors and broker/dealers rose to half of all cases filed, the highest percentage in nearly a decade, according to the report.
The most striking aspect of the data is the timing of enforcement activity, according to the report’s authors. Of the 56 actions against public companies and subsidiaries in FY 2025, 93% occurred before former SEC Chair Gary Gensler stepped down in January (The 2025 fiscal year ran from Oct. 1, 2024, to Sept. 30, 2025.)
The SEC initiated only three actions in the year’s second half—the lowest number since Cornerstone and the Pollack Center began tracking SEC enforcement data in fiscal year 2010.
“Nearly all of this enforcement activity took place before the SEC administration change, with very few actions under the new administration,” said Stephen Choi, the Bernard Petrie Professor of Law and Business at the Pollack Center and co-author of the report. “Our analysis helps us see the timing and composition of activity in ways that overall totals alone may not reveal.”
After Trump succeeded Joe Biden as president in January, Gensler resigned, replaced by Acting Chair Mark Uyeda, a current commissioner. In April, Congress approved Paul Atkins to lead the agency. Atkins subsequently hired Judge Margaret Ryan to lead the enforcement division.
Sara Gilley, who co-leads Cornerstone’s securities litigation practices and co-authored the report, noted that declines in enforcement activity during leadership transitions are not unusual.
However, the second-half activity reached historic lows with only two actions in the fourth quarter of FY 2025. The previous low was six actions in 2011, while the prior second-half low was 19 actions in FY 2017.
The first quarter of FY 2025, Gensler’s last three months leading the commission, set records with 118 standalone enforcement actions and 29 public company and subsidiary actions, both of which are all-time highs.
FY 2025 recorded the lowest total monetary settlements during an SEC administration change at $808 million—the lowest since 2012. However, the median monetary settlement exceeded the levels seen in 2013 and 2021, although it remained below the 2017 figures.
Investment advisors, investment companies and broker/dealers accounted for 50% of SEC actions in FY 2025—the first year both categories exceeded 20% of total actions since data tracking began. Reporting and disclosure issues accounted for 41% of allegations, while investment advisor and company cases represented 27%, and broker/dealer cases accounted for 23%. Investment advisor allegations reached their highest percentage since 2016, except for 2018, when they hit 38%.
The SEC released its examination priorities for 2026 this week, notably eliminating crypto and digital assets as a focus area after including them in the examination priorities of previous fiscal years’ reports. The FY 2025 report had stated that “given the volatility and activity involving the crypto asset markets,” the division would monitor registrants offering “crypto asset-related services.” Cryptocurrencies and digital assets are not included in the new report.
The agency will increase scrutiny of mergers and acquisitions in the investment advisory space, focusing on firms absorbed into existing advisory practices that “may result in accompanying operational and/or compliance complexities or new conflicts of interest.”
“It remains to be seen if this lower level holds and if the types of cases pursued change following Atkins’ appointment of Judge Ryan as director of enforcement,” Choi said.