Securities Enforcement Forum New York 2026: Changing Focus and Growing Risks

The Securities Enforcement Forum New York 2026 recently took place in New York City, highlighting shifting priorities and emerging risks in the securities enforcement landscape. One of the key points discussed was the increased scrutiny of prediction markets by regulatory bodies such as the Department of Justice (DOJ), Securities and Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC). Fraud and manipulation within prediction markets will be met with prosecution, as prediction market contracts fall under the purview of the CFTC.

In the Southern District of New York (SDNY), there is a newfound emphasis on incentivizing companies to self-report financial crimes through conditional declinations that offer greater certainty to cooperating entities. However, companies that choose not to cooperate will face consequences. The SDNY’s focus on cooperation was further elucidated by Andrew Thomas, co-chief of the Securities and Commodities Fraud Task Force, who detailed the forthcoming guidance intended to prosecute individuals involved in financial crimes while rewarding cooperation. Under this new framework, companies that self-report financial crimes can receive a conditional declination agreement swiftly, with the entity committing to standard cooperation, remediation, and restitution of victims. If all conditions are met, the matter is finalized without discussions of penalties or fines. Non-cooperative entities will face repercussions for criminal activity.

While the SEC remains focused on core fraud and accounting cases, there is a growing interest in artificial intelligence-related risks and evolving cryptocurrency policies. The states are expected to play a crucial role in filling in enforcement gaps left by federal agencies. Recent SEC enforcement actions under Chairman Paul Atkins have highlighted a focus on clear cases of fraud with identifiable investor harm. However, delays in enforcement activity have been noted, attributed to staffing concerns and institutional knowledge loss due to significant departures within the SEC.

As federal SEC enforcement has declined, state attorney general activities have increased, tackling a range of violations from Ponzi schemes to insider trading cases. State enforcement, though episodic due to resource constraints, can introduce uncertainty, as different regulators may take varying approaches to enforcement issues. Panelists discussed a case brought by the New York Attorney General against Emergent BioSolutions, Inc. and its CEO, which deviated from traditional SEC practices, adding uncertainty for corporate clients.

Financial reporting and accounting fraud continue to be top priorities for the SEC, with notable cases illustrating revenue recognition fraud, undisclosed executive actions, and negligence-based fraud charges. Chairman Atkins has expressed interest in reducing disclosure burdens by allowing companies to become semiannual filers and revising Regulation S-K. Concerns regarding AI misuse and overstatement of capabilities have led the SEC to establish a focus on AI-related enforcement.

The discussions at the Securities Enforcement Forum New York shed light on the evolving landscape of securities enforcement and the regulatory priorities that will shape the industry in the coming years. It is evident that companies will need to navigate changing regulations, cooperate with authorities, and stay vigilant in preventing financial crimes to thrive in this shifting environment.