On April 7, the SEC announced its enforcement results for the fiscal year ended September 30, 2025.
In a critique of prior SEC leadership, which operated the Commission for the first 3.5 months of that fiscal year, the current SEC stated that, regrettably, the SEC’s resources had been “misapplied in prior years to pursue media headlines and run up numbers, and in turn, led to misguided expectations on what constitutes effective enforcement.” Further, the current SEC characterized this 3.5-month period as an unprecedented rush to bring a significant number of cases in advance of the inauguration of President Trump on January 20, 2025, which included the aggressive pursuit of novel legal theories.
In contrast, the current SEC noted, it has deliberately refocused the Commission’s enforcement program on matters of fraud—cases that inherently require more time and resources to develop and bring forward, often requiring two or more years to manifest results.
Going forward, the SEC plans to link its enforcement priorities and results to its core mandate, and will thus contemplate the following elements to fulfill its mission:
- Standing up to fraud in its many forms;
- Addressing fraudulent and manipulative conduct of industry participants; and
- Repaying investor losses when harmed.
SEC Chair Paul Atkins noted: “Over the past year, the Commission has put a stop to regulation by enforcement and recentered its enforcement program on the Commission’s core mission by prioritizing cases that provide meaningful investor protection and strengthen market integrity. We have redirected resources toward the types of misconduct that inflict the greatest harm—particularly fraud, market manipulation, and abuses of trust—and away from approaches that prioritized volume and record-setting penalties over true investor protection. A key part of this course correction is a renewed emphasis on holding individual wrongdoers accountable, which promotes stronger deterrence and better safeguards investors. I am proud of the staff’s work in advancing an enforcement program grounded in sound judgment, clear legal authority, and the real-world needs of the investing public.”
Monetary Relief
In connection with its fiscal year 2025 enforcement actions, the SEC obtained orders for monetary relief totaling $17.9 billion. However, the exclusion of amounts incurred in subsequently “deemed satisfied” cases significantly reduced the actual monetary relief obtained by the SEC in fiscal year 2025 to $2.7 billion in disgorgement and prejudgment interest, and $1.3 billion in civil penalties.
Per the SEC’s release, the results do not include the 1,095 matters in which potentially violative conduct was investigated, and which were closed, the several matters in which market participants remediated their practices, or cases that were otherwise not pursued.
Areas of Focus
Within these enforcement results, the SEC noted its continued focus on protecting the interests of retail investors, who may be particularly vulnerable to securities fraud, while prioritizing the identification and remediation of fraudulent conduct.
Other areas in which the SEC Enforcement Division will focus its resources in fiscal year 2026 include violations of federal securities laws, combatting securities fraud wherever it occurs, safeguarding markets from abusive trading, and the misuse of emerging technologies.
Takeaways:
- The current SEC under the leadership of Paul Atkins continues to highlight its more adviser-friendly approach, compared to that of his predecessor, Gary Gensler.
- Further, the current SEC seems far less likely to use its Enforcement Division and related orders against advisers as a tool for policymaking.