SEC Enforcement Claims Tumble Almost 50% This Year

The Securities and Exchange Commission is trying to take a less is more approach.

The agency filed just 67 new actions from February through July, a 47% drop from last year and a 66% decline from 2021, according to an analysis from law firm King & Spalding. Under former chair Gary Gensler, the SEC concentrated on crypto and off-channel communications, while current chair Paul Atkins has shifted the agency’s focus to clear-cut frauds targeting retail investors, marking a sharp contrast between the Biden- and Trump-era administrations.

“Atkins seems intent to dampen the volume of enforcement cases as part of a more ‘business-friendly’ environment in keeping with the tone set by the White House,” said securities lawyer Bill Singer.

Hands Off

Atkins has emphasized that investor protection remains central to the SEC’s mission and pledged to hold accountable those who “lie, cheat and steal.” That philosophy appears to be the guiding principle behind the majority of new cases this year, King & Spalding found:

• Nearly 50% of cases involve fraudulent securities offerings.
• About 25% target advisors accused of crimes such as misappropriating client funds.
• Meanwhile, insider trading and issuer reporting cases — historically core priorities regardless of which party is in power, the report noted — are down both in number and percentage compared with 2024 and 2021.

The decline may also stem from staffing challenges. As of May, roughly 15% of the SEC’s workforce had departed after taking buyouts or early retirements, further limiting enforcement capacity. Beyond new cases, the agency has frequently sought time extensions on older ones, creating a backlog and the illusion of regulatory activity, despite being a “mere punt,” Singer told Advisor Upside.

Battle of the Chairmen. Which chairman is more effective remains open to debate. Gensler buried staff under a flood of proposals, amendments, and disputes over crypto’s status as a security, while Atkins has been slower to act on both new and old cases, Singer argued.

“In comparing Gensler and Atkins to chess grandmasters, the former had a compelling game strategy but ran out the clock while over-thinking each move, whereas the latter just re-sets the clock after spending a lot of time touching a piece but not moving it,” he said.