Key Takeaways
- The SEC is sharpening its enforcement focus on individual accountability and core issues such as financial reporting, accounting fraud, and insider trading.
- The securities bar faces ongoing uncertainty about how shifts in staffing may alter enforcement processes and priorities.
- Emerging areas of technology—such as artificial intelligence and cybersecurity—remain top priorities, though the SEC is embracing a flexible, tech-neutral approach to enforcement.
Senior Division of Enforcement officials from the U.S. Securities and Exchange Commission (SEC or Commission) spoke with SEC alumni, private practitioners, and other professionals at the Securities Enforcement Forum Central 2025 (the Forum), held on September 25, 2025, in Chicago—one month following the SEC's announcement of the new Director of the Division of Enforcement, Judge Margaret "Meg" Ryan. Discussions centered on shifting enforcement priorities and practical strategies for adapting to regulatory changes. Amid declining case and staff numbers, the securities bar is raising important questions about the staffing of enforcement matters and the risks posed by the loss of senior-level expertise.
Enforcement Priorities and Developments
SEC panelists noted that recent leadership and organizational changes are unlikely to significantly affect the staff's day-to-day responsibilities. However, members of the securities bar emphasized that uncertainties persist—including what to expect in terms of case volume and engagement—many of which were not fully addressed during the Forum. Regardless, one thing remains constant: Registrants should anticipate adjustments to enforcement as leadership priorities evolve.
Individual vs. Company Accountability
The SEC continues to emphasize individual accountability, especially where investor harm is involved. Given the renewed focus on individual liability, panelists noted that companies may need to consider obtaining separate outside counsel for officers at the outset of any investigation. Companies, however, are not immune to liability and should keep in mind that the Commission evaluates whether a proposed remedy is sufficient if it will safeguard investors or risk causing additional harm. Moreover, companies would be well advised to look beyond the next few years when assessing liability risk, as the current enforcement agenda may change under a new administration or shifting priorities within the SEC.
Financial Reporting and Accounting Fraud
The SEC is increasing scrutiny of financial reporting and accounting fraud, focusing on the accuracy of public statements and potential manipulation of financial results. Attention to non-GAAP financial measures remains strong, and Regulation G and Regulation S-K will continue to be key rules. Individual accountability for financial misconduct within companies is also a growing concern. Notably, the SEC will be "paying attention to individuals" and whether they are accountable for financial reporting misconduct within companies.
Insider Trading
Insider trading remains a central enforcement priority, and staff made clear that challenges posed by technology will not deter enforcement. Benjamin Hanauer, Supervisory Trial Counsel, pointed to two cases with interesting evidentiary issues.
First, Hanauer pointed to charges the SEC brought in March 2025 against Eamma Safi and Zhi "Josh" Ge for their involvement in an alleged international insider trading scheme, where the SEC overcame evidentiary challenges stemming from messaging apps like Signal. Second, Hanauer referenced the SEC's insider trading case against Jack Brewer and the SEC's recent motion for remedies following the U.S. District Court for the Southern District of New York's grant of partial summary judgment in the case. Typically, these cases are not resolved on summary judgment, given the questions of fact surrounding intent. However, here, given the explicit nature of the evidence collected by the SEC surrounding the insider trading scheme, the court found no question of fact remained.
Although panelists agreed that insider trading is likely to continue as a priority under the new administration, the precise approach remains unclear. Given the historically low volume of cases and current staffing challenges, a surge in Commission-led insider trading actions does not seem imminent.
Crypto
Panelists recognized that the current crypto regulatory environment represents a sea change from the former Gensler-led Commission. A common theme throughout the Forum was that because crypto is expected to become mainstream in the financial world, it is important to develop a well-reasoned crypto regulatory regime that provides clear guidance to entities in this space. Though panelists encouraged long-term thinking, they cautioned that state regulators may fill the perceived enforcement gap.
Artificial Intelligence and Cybersecurity
Senior Advisor to the Chief of the Cyber and Emerging Technologies Unit, Arsen Ablaev emphasized that the AI space is a top priority for the SEC due to its transformational impact, complexity, and rapid evolution. He noted that these factors require the SEC to adopt a "well-informed and nimble" regulatory approach. Indeed, the SEC's recent launch of the AI Task Force reflects its own efforts to "enhance innovation and efficiency in its operations" through AI use. AI has a significant impact on cybersecurity, and Ablaev outlined three distinct categories of entities, each presenting unique cybersecurity concerns for investors:
- Publicly traded companies, which are responsible for ensuring that the market is informed of cybersecurity incidents and materials risks
- Registered firms, including broker-dealers and investment advisers, which are responsible for protecting investors' personally identifiable information and assets
- Regulation systems compliance and integrity (SCI) firms, which are tasked with maintaining the resilience and functionality of the market's infrastructure
Notwithstanding these unique cybersecurity concerns, attendees were left with the impression that the Commission will be using a "tech-neutral" approach to the enforcement of federal securities laws and AI, meaning that its use does not make it more or less likely that there was a violation.
Conclusion
The future of SEC enforcement remains uncertain, especially as leadership transitions continue. With the looming government shutdown, it is unclear if the SEC will see further budgetary cuts and, by extension, further reductions in staff (We have already seen a 15% decrease in headcount since the beginning of the current fiscal year.). Further cuts to staff will likely continue to affect not only the speed at which enforcement matters are pursued, but also the enforcement agenda as a whole. Market participants and registered entities should remain vigilant and closely monitor regulatory developments to ensure ongoing compliance with federal securities laws.
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