SEC enforcement actions plummet during Trump administration, research finds
The SEC only brought three enforcement actions in the second half of fiscal 2025, the lowest level ever recorded in a half-year period, researchers say.
Cases involving investment advisors and broker-dealers made up half of the enforcement actions the SEC took against public companies in fiscal 2025, the overwhelming majority of which were brought under the leadership of former Chairman Gary Gensler, according to a new report. Actions under current Chairman Paul Atkins have slowed to a trickle, analysts at New York University and Cornerstone Research have concluded.
The researchers analyzed enforcement actions brought against public companies and their subsidiaries, so their report excludes cases involving wealth managers at small, private registered investment advisory firms or broker-dealers. The authors of the report were Stephen Choi and Giovanni Patti of NYU and Sara Gilley, Heather Lazur, and Evan Schweitzer of Cornerstone.
Cases involving RIAs or investment companies accounted for 27% of fiscal 2025 enforcement actions against public companies, while broker-dealers accounted for 23% of cases. Allegations relating to issuer reporting and disclosure made up 41% of public-company enforcement actions this year.
Overall, the researchers counted 56 enforcement cases brought against public companies and their subsidiaries this year. That was a 30% decline from fiscal 2024, a steep year-over-year drop, though the researchers note that there is usually a downtick in cases brought in years that see a transition in the SEC administration.
Of those cases, however, 52, or 93%, were initiated under Gensler, who left the commission Jan. 20, not quite three months into the fiscal year. In the second half of the fiscal year, which ended Sept. 30, the SEC brought only three enforcement actions, making it the lowest half-year level ever recorded in the database the researchers maintain. The previous half-year low was in the second half of fiscal 2017, when the SEC brought 19 cases.
“What’s striking this year is not the overall decline, but when the actions occurred," Choi says. “Nearly all of this enforcement activity took place before the SEC administration change, with very few actions under the new administration."
The decline in enforcement activity was reflected in the monetary penalties the SEC obtained. In fiscal 2025, monetary settlements involving public companies totaled $808 million, the lowest level since 2012, according to the researchers. Over the previous three years that saw a change in SEC administration, monetary penalties averaged $1.6 billion.
The enforcement trend at the SEC is consistent with the broader deregulatory push across the administration. It also tracks with a previous analysis by the law firm King & Spalding. The record seems to align with Atkins’ own view that the SEC has been overly punitive as a regulator and the expectation that the commission under his leadership would bring fewer actions against companies for technical rule violations that didn’t result in investor harm.
However, the drop in enforcement actions can be explained in part simply by the fact of the transition in administrations. It customarily takes some time for the incoming chair to assemble a leadership team. Atkins didn’t name an enforcement chief until August, when he tapped former military judge Margaret Ryan to lead the division.
“SEC enforcement activity in FY 2025 experienced a sharp decline under Chair Atkins," Choi says. “It remains to be seen if this lower level holds and if the types of cases pursued change following his appointment of Judge Ryan as director of enforcement."
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