US SEC enforcement activity plunges two years into Trump administration

NEW YORK – The US Securities and Exchange Commission (SEC) said on Nov 10 it brought 348 enforcement actions in fiscal 2026, the fewest cases since 1991, according to a Reuters review of agency statistics.The agency’s actions were down from 456 a year earlier, as the Wall Street watchdog said it levied nearly US$1.1 billion (S$1.4 billion) in fines and other financial remedies.That was the lowest level of penalties it has imposed since 2008, on a non-inflation-adjusted basis, according to the Reuters review of figures published on the SEC’s website.The figures are likely to stoke concerns among Democrats and consumer advocacy groups that the agency, which oversees more than 30,000 brokers, funds and other financial firms, is dramatically stepping back from enforcement under Republican US President Donald Trump’s administration.Republican leaders, who took the helm of the SEC in January 2025, have generally argued that overly onerous enforcement stifles business and in the case of public corporations, punishes shareholders.Current SEC Chairman Paul Atkins, for example, has described its previous enforcement stance as opaque and unpredictable.“The success of the SEC’s enforcement programme is ultimately measured by how effectively it advances the SEC’s mission, protects investors, holds wrongdoers accountable, and strengthens confidence in our markets,” Atkins said in a statement about the SEC’s annual report.“Enforcement actions and financial remedies are important measures of activity, but they are not the only or most telling measures.”The total penalties levied in fiscal 2026 included US$343 million in civil penalties and another US$752 million in disgorgement of ill-gotten gains, the SEC said.US Senator Elizabeth Warren of Massachusetts, who is seen as likely to lead the Senate Banking Committee in 2027 when Democrats take control of Congress, expressed concern over the enforcement slowdown.“The new Democratic majority in Congress will closely scrutinise whether the Atkins SEC is protecting the American people – or working for scammers and Trump’s billionaire buddies on Wall Street,” she said in a statement.Changes at top US markets regulatorAtkins has said SEC enforcement should focus more on bread-and-butter fraud.In fiscal 2025, the SEC levied US$17.9 billion in fines and other remedies largely on the back of a huge final judgment for a Ponzi scheme case brought in 2009. Activity and fines otherwise declined.The agency’s enforcement team went through upheaval during the first 18 months of Trump’s second term, with staff leaving in droves and the enforcement director quitting just six months into the job.The staff exodus left the SEC with fewer resources to police Wall Street, though it has since hired for some positions.New SEC Enforcement Director David Woodcock recently told Reuters in an interview that he is now “comfortable” with current staffing levels and thinks the agency will be able to do more with less.In remarks prepared for an evening event on Nov 10 at Fordham Law School, Woodcock said that “activity and effectiveness are not the same”.“Chairman Atkins has given us room to focus on strengthening the programme rather than maximising any single year’s totals – an important opportunity we have seized upon,” he said. REUTERS