It should surprise no one that the SEC is bringing fewer cases during this time of transition, staff
reductions and new leadership. More than 15 years ago, then-Commissioner Atkins criticized the SEC’s
emphasis on statistics on penalties imposed and the number of actions brought, and in 2008, he called
for a “re-evaluation of the incentives” for Division of Enforcement staff to bring such actions, which he
noted include “promotions, awards, and public recognition.”His views have not changed. During his Oct. 7 keynote at the A.A. Sommer Jr. lecture, Atkins delivered a
similar message:“If we reward the staff only for bringing enforcement actions, then we have discouraged the staff from
determining not to recommend an enforcement action. A basic tenet of management is, “You get what
you measure.” The wrong incentives make it more difficult for the staff to follow the evidence and the
law wherever it leads and instead encourage the staff to stretch the boundaries of existing law. Our goal
is to reward the staff for their quality work and [judgment] on cases to bring, violations to charge, and
relief to seek. All of this aligns with the belief that I share with Al Sommer: that the manner in which we
achieve outcomes is critical.”Only nine months into the new administration, it is too early to tell what will define Atkins’ tenure,
though we have a sense that he will not stray far from his stated commitment to focus on what has
traditionally been considered fraudulent activity.As we have seen so far, this is not the SEC of 10 months ago. Recordkeeping violations are much less
likely to trigger SEC enforcement, but insider trading, fraudulent securities offerings and market
manipulation remain a surefire way to end up on the wrong end of an SEC investigation.
Source: SEC Focused On Fraud As Actions Markedly Declined In 2025 | Covington & Burling LLP