Panelists emphasized the significant decline in SEC enforcement activity in the first half of this fiscal year compared with last year and prior years. Several factors contributed to this decline, including the delayed appointment of former Enforcement Director Judge Margaret Ryan, her departure six months later, and reduced staffing and resources. Relatedly, parallel investigations have also decreased, though panelists expect such investigations to increase when an issue makes headlines, like those involving significant financial impact, emerging industries, insider trading, or prediction markets. In fact, the DOJ brought its first case involving prediction markets, with allegations akin to insider trading, just last month. Even so, panelists described how agency leadership is looking to bring more cases, particularly in emerging areas, which will take time as those areas develop. Moreover, panelists noted that the plaintiffs’ bar and state attorneys general have become more active, potentially filling the gap left by reduced federal enforcement.
