Dive Brief:
- Securities and Exchange Commission enforcement actions during fiscal year 2026 fell 57% below the eight-year average beginning in fiscal year 2018, pushed down by factors including low staffing levels and changes in agency procedures, the Brattle Group said.
- Insider trading cases during the period registered the highest share of enforcement actions since fiscal year 2018, accounting for 12.3% of 308 actions, the Brattle Group said Tuesday in a study. Delinquent filings and flawed securities offerings led the list of allegation categories, according to Brattle Group.
- "Several developments shaped the context for enforcement this year, including the government shutdown, persistently low staffing levels and a change in Enforcement Division leadership," Brattle Group Principal Jan Jindra said. "Filings increased substantially in the second half, particularly in September, but the annual total remained far below historical levels," he said in a statement.
Dive Insight:
After taking the post as SEC chairman in April 2025, Paul Atkins put the enforcement division on a different track, focusing on fraud and ending what he called “regulation by enforcement” under his predecessor, Gary Gensler.
“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,” Atkins said in a statement.
“A key part of this course correction is a renewed emphasis on holding individual wrongdoers accountable, which promotes stronger deterrence and better safeguards investors,” he said.
In line with the emphasis by Atkins, SEC enforcement against individuals during the first half of fiscal year 2026 increased compared with prior years, the Brattle Group said.
The proportion of actions targeting individuals tapered off during the second half of the fiscal year but still fell in the upper level of the historical range, according to the Brattle Group.
SEC staff reductions and the record-long government shutdown slowed enforcement to a degree during fiscal year 2026, the Brattle Group said.
After the start of Donald Trump’s second term as president in Jan. 2025, the agency cut staff by 18% through September 2025 in line with several executive orders, according to the Government Accountability Office.
In a potentially disruptive procedural change, the SEC overhauled its enforcement manual, announcing in February “significant updates” to guidelines including the Wells process, which allows companies and individuals to make their case to the agency in detail before being subject to a formal charge of wrongdoing.
Leadership changes also slowed the pace of enforcement, with Margaret Ryan resigning as enforcement director in March 2026 and David Woodcock taking that role in May, the Brattle Group said.
