SEC Speaks 2025—Four Key Takeaways

Key Takeaways

• Commissioners are divided over the SEC’s regulatory and enforcement agenda.
• Structural changes and staff reductions leave uncertainty as to the impact on enforcement actions.
• The SEC returns to basics in its enforcement focus.
• Crypto and AI remain prominent points of discussion as the SEC grapples with regulation and enforcement.

Leadership of the U.S. Securities and Exchange Commission (SEC) discussed the agency’s objectives and priorities during the Practising Law Institute’s SEC Speaks conference held on May 19 and 20 in Washington, D.C. Chair Paul Atkins announced that it is a “new day” at the SEC, which is “getting back to [its] roots of promoting, rather than stifling, innovation.”

Commissioners Divided Over Enforcement Agenda 

Commissioner Mark Uyeda remarked that “[s]ince January, the Commission has undergone a major course-correction,” highlighting that “[i]nstead of tackling various perceived social ills through financial regulatory tools, the SEC has returned to its core mission of regulating the capital markets.” He applauded these “course-corrections,” including crypto-related developments such as the creation of the Crypto Task Force and dismissal of certain crypto enforcement actions, the issuance of CDI 103.12 to address Schedule 13G eligibility and the bounds of shareholder influence, and the recent release of Staff Legal Bulletin No. 14M on shareholder proposals, along with the rescission of the prior Staff Legal Bulletin No. 14L as a result. Commissioner Hester Peirce announced that “the Commission now has begun the work of providing clarity” following the Commission’s previous practice of “rel[ying] on enforcement actions to tell people how it views the application of securities laws to crypto and as a substitute for notice-and-comment rulemaking.”

Commissioner Caroline Crenshaw, however, disagreed with these sentiments. She characterized her remarks as a “word of caution as the agency chips away at decades of [its] own work—and, at the same time, as [it] stare[s] down alarming market volatility, emerging risks, and calls for deregulatory action in all corners of our markets.” She lamented that the so-called course corrections “corrode[] [the SEC’s] reputation in front of courts, [] undermine[] the credibility of the Commission and staff [], and [] cast[] doubt on the state of longstanding and fundamental case law,” ultimately “create[ing] confusion and disarray.”

It remains to be seen how these regulatory shifts will affect enforcement, although Acting Director for the Division of Enforcement Sam Waldon opined that they will not be significant—a view that contrasted other panelists’ positions articulated during the conference. Regardless, market participants, regulated entities, and practitioners seek clarity regarding the application of newly articulated regulatory changes to enforcement.

Structural Changes and Staff Reductions

Earlier this year, the SEC changed its reporting structure for its regional offices. Instead of having a regional director for each of the SEC’s 10 regional offices, there are now three deputy directors to oversee three geographic regions (the Northeast, Southwest, and West) and one deputy director for the specialized units. Enforcement staff report directly to one of the four respective deputy directors. In other reporting changes, chief counsel, chief litigation counsel, and the chief accountant report directly to the director of enforcement. Notably, the headcount at the SEC’s offices and divisions has decreased by 15% since the beginning of the fiscal year. 

In addition, in March 2025, the Commission amended the formal order process, eliminating the previous delegation of formal order authority to the director of enforcement. Formal orders enable the SEC to exercise subpoena power in connection with investigations. Now, formal orders must be authorized by the Commission, but the staff does not anticipate that the change will hinder the division’s ability to carry out its work. 

The structural reorganization, narrowed formal order authority, and staff reductions will likely affect both the nature and number of enforcement proceedings, and it remains to be seen whether these changes positively or negatively affect the SEC’s enforcement priorities.

Enforcement Focus: Back to Basics

The phrases “bread and butter” and “back to basics” echoed throughout the conference as it became clear that Enforcement will continue to prioritize core areas of its program, such as insider trading, accounting and disclosure fraud, offering fraud, market manipulation, and breaches of fiduciary duties by investment advisers. 

Similarly, while Enforcement has traditionally focused on individual accountability, Waldon noted there will be greater emphasis on it moving forward. Indeed, staff emphasized that companies act through individuals, and the SEC will hold those individuals accountable when appropriate. Additionally, self-reporting, cooperation, and remediation will continue to be rewarded. The market can expect that there will be less focus on violations that do not involve fraud, especially where there has been full remediation, though nonfraudulent conduct that is severe, long-term, or ongoing will still be subject to enforcement scrutiny. 

Cryptocurrency and Artificial Intelligence (AI) 

Cryptocurrency

According to Chair Atkins, “the SEC first pursued the ‘head-in-the-sand’ approach” to crypto, “perhaps hoping that [it] would go away,” then pivoted to a “shoot-first-and-ask-questions-later approach of regulation through enforcement,” leaving market participants in what he called a “catch-22.” In order to address these concerns, Chair Atkins has directed staff across policy divisions to begin drafting rule proposals related to crypto and to “‘clear the brush’ through staff-level statements.” Chair Atkins also mentioned that he would “like the Commission to allow registrants to custody and trade both securities and non-securities under one roof,” reducing costs for investors and “allowing non-security trading to enter a regulated environment at the federal level expeditiously.”

Commissioner Peirce dedicated the entirety of her speech to cryptocurrency. She acknowledged that while crypto is “not the most critical issue for the Commission, [] it is important.” She highlighted what she viewed as the differences between crypto that should and should not be regulated by the SEC. Commissioner Peirce noted that the “biggest challenge for crypto market participants, including issuers, crypto trading venues, and early-stage purchasers, is determining when a non-security crypto asset subject to an investment contract separates from the investment contract,” since “[d]istinguishing the crypto asset from the investment contract allows the asset to trade freely outside of the securities laws.” Commissioner Peirce further acknowledged that “[f]orthcoming rulemaking by the Commission and legislation from Congress should continue to provide clarity about which crypto assets are securities” and thus regulated. 

It is evident that cryptocurrency regulation will continue to evolve under this new administration. 

AI

The pervasiveness of AI led the Office of the Chief Accountant to evaluate how to responsibly integrate AI into financial reporting—an exercise that auditors and management alike could benefit from. Staff advised companies as an initial matter to conduct a risk assessment to ensure their AI is sound. While AI certainly introduces new risks, the foundations of risk assessment remain the same. 

Staff is also focused on ensuring that financial reporting and disclosures related to AI are accurate. Given this focus, it is likely that the market will continue to see enforcement actions relating to AI use and disclosures. 

Conclusion

The Commission is redefining its priorities and how it views longstanding rules. Ultimately, whether this new agenda provides needed protections to investors and the market—or undermines the credibility of the Commission and staff—will unfold over time. 

For more information, an expanded version of this Update was previously published in Law360.