The new presidential administration began on January 20, 2025, and change came quickly to many federal agencies, including the U.S. Securities and Exchange Commission (SEC). On Inauguration Day, Paul S. Atkins was nominated to be the new Chairman of the SEC. The next day, January 21, Commissioner Mark T. Uyeda was named Acting Chairman to lead the SEC until Atkins was confirmed by the Senate. Commissioner Uyeda headed the SEC through mid-April, when Chairman Atkins was confirmed.
Many speculated about what the SEC’s Division of Enforcement would – or would not – do in the new administration. With the first quarter of 2025 completed, it seems a good time to review what occurred across the SEC enforcement landscape.
Snapshot of the Stats
Much has been said about cases the SEC moved to dismiss or stay in the first quarter, especially in the crypto asset space. But what new cases did the SEC bring?
Although the SEC typically does not publicize its enforcement statistics until after the government’s fiscal year ends in September, the SEC discloses each new case on its website. A review of those cases shows that, at a high level, the SEC brought the following actions from January 21, 2025, the day Commissioner Uyeda was named Acting Chairman, through the end of the first quarter on March 31, 2025.
- The SEC filed 26 stand-alone enforcement actions, consisting of:
- 18 actions in federal district courts; and
- Eight administrative proceedings.
- The subject matter of those actions included:
- 19 cases alleging fraudulent conduct (other than insider trading);
- Six insider trading cases;
- Six cases involving investment advisers;
- Five cases with parallel criminal proceedings; and
- One case alleging violations of Regulation BI by a broker-dealer and several registered representatives.
- The SEC also brought 19 follow-on actions, imposing various suspensions or bars based on the entry of an order in a prior civil or criminal proceeding.
(The subject matters listed above exceed the number of stand-alone actions because a single action might involve more than one subject matter. For example, one case might involve both fraudulent conduct and an investment adviser.)
Key Takeaways
Admittedly, January 21 through the end of the first quarter provides only a limited sample of cases, and a disproportionate number of SEC enforcement actions tend to be filed around September – the last month of the government’s fiscal year. But several points can be gleaned from these first few months of 2025:
First, the SEC continues to bring new cases. Any predictions that the SEC would not pursue enforcement actions in the new administration seem to be unfounded thus far. It appears that, while certain enforcement priorities have shifted, the SEC remains active in conducting investigations and filing actions.
Second, the SEC appears to be most active in traditional enforcement areas, including actions involving fraudulent offerings, misstatements, insider trading, and registered entities such as investment advisers and broker-dealers. Thus, issuers should continue to ensure that their periodic reports, disclosures, and other statements remain accurate. Similarly, registered investment advisers and broker-dealers, who are subject to examinations by the SEC, should ensure that their disclosures are accurate and that their compliance functions operate effectively.
Third, the SEC continues to coordinate with criminal enforcement authorities, often at the U.S. Department of Justice, on parallel investigations. So, parties involved in SEC investigations should be mindful of potential criminal exposure arising from the same facts.
Fourth, the SEC continues to impose follow-on remedies. Non-monetary remedies in a follow-on proceeding – such as a bar from associating with an investment adviser or broker-dealer – may be career threatening. Accordingly, potential follow-on remedies should be carefully considered when contemplating litigation or settlement with the SEC.