SEC Enforcement Activity Declines Sharply in FY 2025
Commentary by Kevin Harnisch and Steven Lofchie
The NYU Pollack Center for Law & Business and Cornerstone Research reported that SEC enforcement activity dropped sharply in FY 2025, with both the number of actions and monetary settlements declining.
According to the analysis, FY 2025 continued the historical pattern of reduced enforcement activity during periods of SEC leadership transition. The researchers noted that the SEC initiated 56 actions—a 30% decrease from FY 2024—and that total monetary settlements dropped 45% to $808 million, "the lowest [level] since FY 2012." They further observed that enforcement activity slowed markedly in the second half of the fiscal year, with only three actions initiated following the administrative change.
The researchers found:
- A Decline in Enforcement Activity. The SEC initiated 56 actions against public companies and their subsidiaries, a 30% decrease from FY 2024. Total monetary settlements fell by 45% to $808 million—the lowest amount since FY 2012 and the second-lowest in the Securities Enforcement Empirical Database ("SEED"). The researchers attributed these declines to shifting enforcement priorities following the change in SEC leadership.
- An Impact from Administration Change. FY 2025 displayed a stark contrast between outgoing and incoming administrations. A record 52 actions—93% of the year’s total—were filed under Chair Gensler before he stepped down in January 2025. In contrast, the new administration, led initially by Acting Chair Mark Uyeda and subsequently by Chair Atkins, initiated only four actions—the fewest ever recorded for the first fiscal year of a new leadership team. The researchers suggested that this slowdown reflects a more restrained enforcement philosophy.
- Enforcement Trends. Issuer Reporting and Disclosure allegations comprised the largest share of actions (41%), followed by Investment Adviser/Investment Company (27%) and Broker-Dealer (23%). The researchers reported that the elevated number of early-year actions resulted partly from a final wave of "off-channel communications" cases filed in January 2025. Looking ahead, they expect Chair Atkins to focus on the SEC’s "core mission," with Issuer Reporting and Disclosure remaining a priority.
- Settlements and Cooperation. 73% of settling defendants received cooperation credit, consistent with the SEC’s continued emphasis on cooperation incentives. Disgorgement and prejudgment interest totaled $108 million—the lowest amount for any fiscal year in SEED’s history. The researchers noted that, despite the Supreme Court’s ruling in SEC v. Jarkesy, civil penalties imposed through administrative proceedings represented the highest percentage of total monetary settlements ever recorded in SEED.
The researchers also highlighted the dismissal of the SEC’s civil action against Coinbase—the first such dismissal in SEED’s history. They said that this development aligns with Chair Atkins’s stated priority of establishing a stable regulatory framework for digital assets and concluded that it will likely signal a recalibration of the SEC’s approach to digital-asset enforcement.
Commentary
The number of enforcement actions and amounts of fines imposed in a given year are false proxies for assessing the effectiveness of the enforcement program. A decline in the number of enforcement actions is a logical result of a shift in priorities under Chair Atkins, and an emphasis on moving away from actions that create the impression of trying to achieve regulation through enforcement. The more interesting data points are only now being developed as there is a new Director of Enforcement and the staff is beginning to implement the Commission’s new strategic focus.
Commentary
It is an unfortunately political reality that regulators may use high numbers of enforcement actions and penalty amounts as a metric for success. But is it? Perhaps economic growth and clarity of rules are better metrics, even if they are less amenable to press releases.