Securities enforcement is not going anywhere in 2025. The enforcement agenda of the Securities and Exchange Commission (SEC) will surely be impacted by its new leadership under Paul Atkins, President-elect Donald Trump’s selection for SEC chair and a former SEC commissioner from 2002 to 2008. But the agency’s core commitments—policing fraud and market manipulation, perceived conflicts of interest, and conduct that may harm retail investors—have historically been championed by commissioners of both parties and are likely to continue unabated. Even in areas in which enforcement is likely to substantially diminish—such as crypto or environmental, social, and governance (ESG) disclosures—the SEC will likely still have interest when there are concrete allegations of fraud or investor harm. One notable change, however, is that the SEC may be less likely to support enforcement based on technical violations of the federal securities laws that lack intentionality or specific underlying harm. New leadership might also implement procedural changes that will affect how investigated parties and their counsel experience the enforcement process, and we may see a substantial reduction in penalties against public companies, given that Atkins has criticized such penalties as harming existing shareholders. Finally, there is uncertainty regarding staffing at the SEC that may impact SEC enforcement in the coming years.

Substantive Priorities—What Will Change and What Will Remain the Same?

  • Diminished crypto-related enforcement actions but a continued focus on fraud
The SEC’s scrutiny of the crypto industry—and the articulation of its broad view that digital assets are securities subject to the agency’s jurisdiction—began during Trump’s first term under the leadership of former Chair Jay Clayton. Over the last four years, however, President-elect Trump has become a vocal supporter of crypto, and his nomination of Paul Atkins for SEC chair suggests that the SEC’s focus on the crypto industry will relax significantly in 2025. Under Chair Gary Gensler, there has been a substantial increase in the number and reach of crypto-related enforcement actions and a willingness to bring cases against well-established exchanges and other market participants based on the SEC’s determination that they are listing or otherwise transacting in securities. This approach has been heavily criticized as “regulation by enforcement” by proponents of the industry and, perhaps more critically, by Atkins and the two current Republican SEC commissioners (one of whom will also serve as acting chair until a permanent chair is appointed). For instance, Commissioners Hester Peirce and Mark Uyeda have repeatedly criticized the agency for failing to provide clear guidance about when digital assets are considered a security, thereby stifling innovation and creating an untenable environment for market participants in this space. (See Peirce & Uyeda, “On Today’s Episode of As the Crypto World Turns: Statement on ShapeShift AG” (March 5, 2024)). Atkins has similarly expressed concerns that the SEC’s approach to crypto enforcement has driven innovation abroad, harming U.S. interests. (See Dave Michaels, “Trump Picks Paul Atkins to Run SEC,” Wall Street Journal (Dec. 4, 2024)).