SEC, CFTC, and PCAOB’s updates on securities regulation and enforcement

In our 2026 Year in Preview series, we explore the upcoming trends in white-collar law and investigations. The year 2025 brought about significant changes in securities enforcement priorities during the first year of the second Trump Administration. As we enter 2026, the SEC and the financial regulatory landscape continue to evolve. There is a shift in policy priorities, focusing on various areas such as regulatory actions concerning compliance issues, ESG financial statement disclosures, and a restructured approach to cryptocurrency.

One of the critical changes includes a new method to differentiate between securitized and non-securitized digital assets, aiming to encourage the digitalization of traditional securities. Additionally, there is a revamp of the Wells Process, ongoing emphasis on individual accountability, and a reevaluation of administrative enforcement adjudication following the Supreme Court’s Jarkesy decision in 2024. Despite these revisions, recent enforcement actions highlight that the SEC will still prioritize traditional fraud enforcement, particularly financial statement fraud, in 2026.

Enforcement in Traditional Fraud Areas Continues

With Chair Gary Gensler leaving in January 2025, Acting Chair Commissioner Mark Uyeda took the lead until Chair Paul Atkins assumed office on April 21, 2025. Commissioner Uyeda was critical of the SEC’s regulatory enforcement sweeps related to record-keeping and proposals for ESG disclosures. The shift in the SEC’s approach proceeded under Chair Atkins, who opposed the previous administration’s pursuit of large corporate fines and enforcement actions that consumed excessive resources without correlating to investor harm.

Under this new leadership, the SEC has redirected its focus towards traditional forms of fraud that directly impact investors. Insider trading, offering fraud, Ponzi schemes, market manipulation, and adviser fiduciary breaches are now prioritized over technical or novel violations. The enforcement data from 2025 highlights this shift, revealing that around 33% of new enforcement suits targeted offering fraud or insider trading. Actions taken in 2025, such as charging individuals for operating Ponzi schemes and engaging in insider trading, demonstrate that a renewed emphasis on traditional fraud will likely continue into 2026.

Moving Away from Regulation by Enforcement While Promoting Market Integrity

The SEC’s new leadership signals a recalibration in enforcement priorities for companies. While accounting and auditing standards violations are still under scrutiny, the emphasis has shifted towards clear-cut violations constituting fraud or misleading investors. Chair Atkins has expressed a commitment to provide companies with notice of technical violations before taking enforcement action. The SEC’s stance on disclosing climate-related risks has also evolved, with rules requiring such disclosures being deemed costly and intrusive.

Although enforcement actions for earnings management have decreased in 2025, the SEC’s approach remains vague, particularly in earnings management cases. The SEC’s vigilance regarding public companies’ financial disclosures persists, as seen in the recent settlement with a major public company for inflating the performance of a business unit using accounting techniques. This case highlights the SEC’s commitment to upholding market integrity for investors.

In conclusion, while the SEC’s enforcement strategy may appear to soften in some areas, it is becoming more targeted and focused. The transition to a less aggressive regulatory approach may result in a resurgence of more traditional financial statement cases in the future. The SEC’s evolving priorities and enforcement actions will be closely monitored throughout 2026.