Securities Enforcement Forum New York 2026: Shifting Priorities and Emerging Risks

Key Takeaways

• Prediction markets are squarely in the DOJ, the SEC, and the Commodity Futures Trading Commission’s (CFTC) sights, so fraud and manipulation will be prosecuted, and CFTC rulemaking on event contracts is advancing.
• The Southern District of New York (SDNY) is incentivizing self-reporting financial crimes with swift conditional declinations that provide greater certainty for cooperating companies, but those who elect not to cooperate will “pay.”
• The SEC’s enforcement focus remains on core fraud and accounting cases while expanding into AI-related risks and evolving crypto policy, with states left to fill in enforcement gaps.

Leading securities enforcement practitioners, government officials, and industry experts gathered for the Securities Enforcement Forum New York, held on February 5, 2026, in New York City (the Forum). Panelists focused on current enforcement trends.

SDNY’s Enforcement Trends and Forthcoming Guidance

Prediction Markets

SDNY U.S. Attorney Jay Clayton signaled that prosecution of fraud in prediction markets, which allow users to bet on the outcome of various events, is coming. “[A] prediction market doesn’t insulate you from fraud,” Clayton stated, offering examples of point shaving and other manipulation schemes. In the United States, prediction market contracts are treated as derivatives or event contracts, thus putting them within the purview of the CFTC. In late January, SEC Chairman Paul Atkins and CFTC Chairman Michael Selig held a joint “Project Crypto” summit in which Selig announced his plans to move forward with drafting an event contracts rulemaking. Prediction markets remain a focus from DOJ to CFTC and beyond. 

SDNY Cooperation Guidance 

Clayton addressed cooperation and self-reporting in a keynote Q&A, signaling a renewed emphasis on incentivizing voluntary disclosure and expressing an intent to provide more meaningful certainty to companies. Andrew Thomas, SDNY co-chief of the Securities and Commodities Fraud Task Force, provided additional details on the SDNY’s forthcoming guidance. The program is designed to “maximize the ability to prosecute individuals while maximizing certainty to cooperation” and only applies to financial crimes. Under the new framework:

1. A conditional declination agreement is provided quickly after self-report. The entity commits to standard cooperation, remediation, and making victims whole.
2. Upon satisfaction of all conditions, the matter is finalized with no discussion of credits against guidelines or fines. 

Unlike prior programs, SDNY’s approach will not disqualify companies where there is an active investigation, so long as they did not know the investigation existed. Nicolas Roos, SDNY co-chief of the Securities and Commodities Fraud Task Force, noted that in a recent matter, a company that self-reported accounting fraud received a conditional declination letter within a month. However, Clayton also plainly stated “[i]f you do not cooperate and there is criminal activity, you’re going to pay for not cooperating.”

States May Fill in the Gaps Amid the SEC’s 'New Day'

Despite the absence of current SEC staff on the Forum panels, panelists assessed the SEC’s enforcement posture one year into Atkins’ chairmanship. Unsurprisingly, recent enforcement actions suggest a focus on clear fraud cases with definable investor harm. However, delays in SEC enforcement activity did not go unnoticed. Panelists noted staffing concerns, as significant departures have resulted in lost institutional knowledge, and newer investigators require more education from defense counsel. Regional director absences and a prolonged shutdown have also contributed to delays in activity.

As federal SEC enforcement declined, state attorney general activity showed a slight uptick in 2025, ranging from Ponzi schemes to broker fee cases to insider trading. However, panelists cautioned that state enforcement has been “episodic” due to resource constraints and varying levels of expertise. It also increases uncertainty as other regulators may take a different approach to issues than the SEC. For example, the New York Attorney General’s (NYAG) case against Emergent BioSolutions, Inc. and its CEO had an unusual result. Although the SEC had brought a disclosure case in April 2025, the NYAG subsequently brought an insider trading action, including charges against the company for approving a trading plan when it should not have. Panelists found this “unusual” and noted it “adds a lot of uncertainty” for corporate clients, as the SEC traditionally would not charge a company for executive insider trading in this manner. 

Financial Reporting: Continued Focus 

Financial reporting and accounting fraud remain at the forefront of SEC priorities. Some notable cases include Near Intelligence, Inc., a bread-and-butter revenue recognition case, and Ammo, Inc., involving an undisclosed barred officer, improper revenue recognition of excise taxes, capitalized costs supported by fake invoices, and undisclosed deviations from options methodology. Additionally, the Spero Therapeutics, Inc. case—where the SEC charged individuals for negligence-based fraud but not the company—signaled that in noncapital fraud cases, individuals may be held accountable while the company is not charged.

Chairman Atkins has also stated that the SEC is “working to fast-track” President Trump’s proposal for allowing companies to become semiannual filers instead of quarterly and is seeking comment on Regulation S-K, with a focus on materiality, to reduce disclosure burdens. Companies should continue to monitor, as this could affect future disclosure burdens. 

AI-Related Enforcement

The SEC’s newly renamed Cyber and Emerging Technologies Unit is focusing on AI-related enforcement. Expected areas of focus include “AI washing” (when companies overstate their AI capabilities), misuse of material nonpublic information in AI models, and Regulation Best Interest issues. 

Panelists noted that the Two Sigma case from 2025, involving a trader who manipulated code for a trading model, may be an indicator of future cases involving AI/machine learning systems. There is also heightened focus on data provenance, where AI training data comes from, with expectations of increased diligence on both providers and users. 

Crypto and Digital Assets Regulation: Pivot to Policy

The crypto regulatory landscape has shifted dramatically under the current administration, with many companies receiving termination letters from the SEC as the agency moves from “regulation by enforcement” to policy formation. Atkins has announced the SEC is considering an “innovation exemption” for products that may not fit neatly within existing regulations. The White House Crypto Report provided additional clarity, affirming the SEC’s continued role while contemplating a “super-app” approach for custody, trading, and other functions on a single platform.

Perhaps in an effort to fill the void, state enforcement remains active. At least one state sued for SEC-regulated conduct after the SEC dismissed its enforcement action. Similarly, NYAG’s Galaxy case—brought under the non-scienter Martin Act—resulted in a settlement involving allegations that executives purchased tokens at discount prices and then conducted a public relations campaign while selling.

Conclusion

The Forum underscored that while SEC enforcement has undergone significant changes in leadership, priorities, and process, core enforcement areas—accounting fraud, insider trading, and investment advisor misconduct—remain firmly in focus. SDNY’s new cooperation framework, state enforcement activity, and emerging issues in AI, crypto, and prediction markets will shape the enforcement landscape in the year ahead. Public companies and market participants should invest in robust compliance programs and consider the evolving calculus around self-reporting.