SEC Slashes Enforcement Efforts Under Trump
NEWS & RESEARCH
In FY2025, the U.S. Securities and Exchange Commission (SEC) cut the number of enforcement actions by 30%. SEC Chairman Paul Atkins, a former crypto industry lobbyist, defended this shift as a move toward "true investor protection" by focusing on high-impact fraud and market manipulation. This transition has been marked by significant internal upheaval, including a mass exodus of 18% of the division's staff, the dismissal of numerous high-profile crypto cases, and a pivot away from the aggressive corporate enforcement. Ninety-three percent of SEC actions in FY2025 were filed under the Biden administration.
SOURCES: Reuters | Cornerstone Research
ANALYSIS & OPINION
Under Trump 2.0, the SEC and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) have pivoted away from aggressive oversight, framed by leadership as a rejection of "regulation by enforcement" in favor of reducing "red tape." However, data suggests a significant decline in accountability: Total penalties dropped from $1.6 billion in the final year of the Biden administration to just $298 million in the first year of the current term, with the average penalty plunging from $25 million to $5 million. This ideological pivot, supported by the appointment of corporate-aligned leadership and a move toward bank self-assessment for illicit activities, reflects a broader trend of deregulation that grants financial miscreants greater impunity. Meanwhile, the SEC has effectively silenced a program that encouraged industry insiders to blow the whistle on white-collar crimes and led regulators to return $1.5 billion to investors. Former Labor Secretary Robert Reich posts: “This is how our government has been corrupted: 1) Donors give huge sums to elect politicians to office 2) Elected officials rewrite rules in the donors’ favor 3) Donors make huge profit 4) Repeat.
SOURCES: Dirt Diggers Digest | Jacobin | Robert Reich
HOW TO FIX IT
Federal action:
Congress should exercise oversight to hold the SEC accountable to its enforcement obligations.
Congress should enact S.2920 to boost penalties for fraud.
Congress should pass legislation, such as the Disclose Act, to eliminate “dark money” and anonymous political donors.
State action: State attorneys general should increase investigations and enforcement actions based on state-level securities laws (blue sky laws).
Legislation: S.2920 - Stronger Enforcement of Civil Penalties Act of 2025 | S.3991 - DISCLOSE Act of 2026
