Securities Enforcement Forum DC 2025: Shifting Focus, Uncertain Guidance

Despite the continued absence of SEC staff amid the government shutdown, the Securities Enforcement Forum in Washington, D.C. (the Forum) went forward on October 30, 2025. Panelists from the industry provided a candid look at the evolving enforcement landscape with the focus on delivering practical guidance for both registrants and legal practitioners.

Key Takeaways

• SEC enforcement priorities remain unclear as a new fiscal year begins amid the ongoing government shutdown.
• Parallel investigations will continue with an increased presence of state attorneys general.
• Panelists predicted a return to "meat and potatoes" enforcement in core areas such as insider trading and financial fraud.

Continued Regulatory Uncertainty

With staff unable to attend the Forum, panelists—mostly comprising former staff now in private practice—relied on experience in pending enforcement cases and reading the tea leaves to identify enforcement priorities.

Approach to Investigations

Panelists emphasized the SEC's shift away from creative legal theories toward traditional actions focused on materiality and investor protection—described as "quality over quantity." Chairman Paul Atkins recently remarked that the SEC aims to reward staff for sound judgment in case selection, violations charged, and relief sought. While high-profile cases will still attract attention, novel matters may see slower or less aggressive pursuit. Individual accountability and streamlined processes in core areas like accounting and disclosure remain high priorities for enforcement.

Panelists continue to get involved in parallel investigations, but with a changing cast and cadence. For example, panelists viewed state attorneys general to be increasingly active, often banding together across ideological lines on issues such as debanking, China‑related disclosures, and consumer‑facing frauds. While some see a multiyear decline in DOJ resources for white‑collar investigations and a corresponding rise in congressional and state-level investigations (including increasing activity by state-level financial regulators), others anticipate that high‑profile criminal securities matters will remain a priority for the DOJ. Fundamental challenges remain, such as navigating complex decisions about cooperation, testimony, and self-reporting, especially when criminal exposure is possible. Panelists underscored the importance of separate representation for individuals and corporations, as well as the need for strategic coordination across investigations.

Back to Basics

Panelists expected continued scrutiny of technical violations, which are "critical to a regulated industry," and predicted a continued focus on individual accountability, streamlined processes, and a return to "meat and potatoes" enforcement in core areas. To that end, a back-to-basics approach to insider trading and financial reporting is expected. The anticipated overarching enforcement theme is combatting fraud that causes real harm to investors.

In that vein, a circuit split on disgorgement and investor harm has developed and is growing. The U.S. Court of Appeals for the Ninth Circuit's recent Sripetch decision highlights uncertainty over whether the SEC must show actual pecuniary harm to investors—a key issue that will inform strategy in these cases. Continued monitoring of court decisions on this issue will further inform strategic considerations at the Wells stage and in settlement negotiations.

While insider trading enforcement remains steady compared to prior years, the number of accounting fraud enforcement actions is down, which panelists attributed to administrative transitions and lagging indicators. Financial reporting cases are expected to increase as leadership settles and investigations mature. Panelists also expected a focus on clear‑cut fraud and material misstatements. Additionally, potential changes to formal reporting frequency (quarterly to semiannual), may not amount to changes in practice. Market expectations, earnings calls, and Form 8‑K triggers may continue to create disclosure obligations and enforcement exposure. Panelists noted they would expect increased attention to Reg FD as companies navigate investor communications between filing dates.

Wait and See: New Technology Risks

Cybersecurity, AI, and crypto remained top of mind for panelists despite being in the "wait and see era" of enforcement.

Cybersecurity. The SEC's cyber unit is applying traditional fraud principles to new technology risks. Disclosure requirements for public companies remain a key focus, with recent guidance clarifying materiality and reporting timelines. Public company cybersecurity rules continue to test response playbooks. The materiality determination must be made "without unreasonable delay," after which the four‑business‑day clock for Form 8‑K disclosure starts. The Division of Corporation Finance's (CorpFin) recent guidance has helped normalize the practice, but the hard calls persist in the gray zone. The SEC has indicated it will not second‑guess good‑faith determinations, while also reserving enforcement for plainly deficient processes or misleading disclosures. Technical violations without investor harm are less likely to result in enforcement action, but vigilance is required, as retail investor protection remains central.

AI. The SEC's internal AI task force signals a commitment to innovation, but as to its role in enforcement, panelists expected AI to fit into existing regulatory frameworks. Likewise, the Financial Industry Regulatory Authority (FINRA) has undertaken extensive internal adoption of AI to increase effectiveness and efficiency of its self-regulatory functions. Governance, compliance, and human oversight are critical. Firms should document AI use, train staff, and maintain a "human in the loop" for decision-making. When assessing AI-related enforcement issues, reliance on AI may be a mitigating factor, but only if supported by robust compliance and human oversight. However, panelists explained that refusal to use AI outright is risky as it becomes the norm, and they encouraged thoughtfully embracing AI and building a regulatory framework around its use. As with prior data analytics initiatives, panelists expected that human judgment would determine when to bring a case, and traditional proof would drive outcomes in court. For registrants and advisers, the message is equally pragmatic: AI can mitigate risk if thoughtfully governed.

Crypto. While the rhetoric suggests a thaw, panelists cautioned against assuming a wholesale pivot from prior crypto enforcement approaches. True fraud cases remain on the table, and staff may still press threshold "is it a security" questions where necessary, though generally Section 5 investigations remain on hold pending the concentrated effort to formulate new rules and policy around crypto enforcement. That said, some registration theories appear to be receding. Staff are engaging more productively on custody, with targeted no‑action relief recognizing state‑chartered trust models under defined conditions. State regulators have been less active than expected—likely a function of resource and preemption questions—but could reemerge as federal contours clarify.

Conclusion

The Forum emphasized a period of uncertainty as we begin a new fiscal year amid an ongoing government shutdown with limited guidance and insight from the staff. Regardless, practitioners must adapt to shifting priorities, increased coordination among state and federal agencies, and the growing influence of technology. Strategic engagement, robust internal investigations, and proactive compliance remain essential in this evolving regulatory environment.

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