SEC Developments

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The following is part of our annual publication Selected Issues for Boards of Directors in 2026. Explore all topics or download the PDF.

Fiscal year 2025 was a year of extremes in terms of the number of enforcement actions brought by the Securities and Exchange Commission (SEC). During the first quarter of fiscal year 2025 (October through December 2024), the SEC reported a record-breaking number of enforcement actions.[1] However, for the remainder of the fiscal year, the SEC’s enforcement numbers significantly declined. Despite the reduction in enforcement actions seen in the second half of the year, there are early indications that enforcement under the second Trump administration is not disappearing but instead shifting focus. Public companies should expect continued SEC enforcement focused on fraud and harm to investors, and should remain mindful of the SEC Enforcement Division’s emphasis on voluntary report and cooperation.Continue Reading The Shifting SEC Enforcement Landscape: 2025 Year-in-Review

The U.S. Securities and Exchange Commission (“SEC”) Division of Examinations (the “Division”) released its 2026 examination priorities on November 17, 2025 (the “2026 Priorities”). As expected from the new leadership, the 2026 Priorities signal less (but still present) focus on private fund advisers and more focus on retail advisers and emerging technologies such as AI and algorithmic advice. Overall, the extremely high overlap in priorities from prior years is notable, leading our main takeaway from the 2026 Priorities to be whether and how the Division Staff will emphasize public messages such as Risk Alerts and Exam Observations compared to private actions like detailed deficiencies and numerous referrals to the Enforcement Division.Continue Reading SEC Exam Priorities 2026 Priorities Largely Consistent: Will Approach to Deficiencies and Enforcement Referrals Change?

On Wednesday evening, the SEC Staff published two new FAQs relating to the presentation of gross and net performance under the Investment Advisers Act Marketing Rule, the sweeping 2022 overhaul of the advertising and endorsement restrictions applicable to registered investment advisers (“RIAs”).  Both FAQs provide significant relief from prior Staff interpretations of the Marketing Rule and will dramatically reduce compliance burdens for RIAs in the areas of performance of individual investments and certain performance “characteristics” of portfolios and investments.  The limited open questions raised by new FAQs pale in comparison to the issues RIAs faced with the prior interpretations.Continue Reading SEC Staff Reverses Some “Gross/Net” Marketing Rule Guidance

On December 20, 2024, the Securities and Exchange Commission (the “SEC”) adopted amendments to Exchange Act Rule 15c3-3 (the “Customer Protection Rule”) to require carrying broker-dealers with $500 million or more in average total credits to perform the customer and PAB (i.e., proprietary accounts of broker-dealers) reserve account computations and make any required deposits daily, rather than weekly (the “Final Rules”).  Approved by a 4-1 vote,[1] the Final Rules included several changes from the proposed rules, which we discussed in our prior Blog Post.Continue Reading SEC Adopts Rules Requiring Daily Computation of Customer and PAB Reserve Requirements for Certain Broker-Dealers

On November 22, the Securities and Exchange Commission announced its enforcement results for the 2024 fiscal year with a record $8.2 billion in financial remedies.[1]  At the same time, a few cases and sweeps comprised the vast bulk of that amount, and the number of cases brought dropped by 26%.  In a press release announcing the results, Acting Enforcement Director Sanjay Wadhwa touted the agency’s “high impact enforcement actions” and noted “stepped up efforts” by market participants to self-report their own potential wrongdoing, cooperate in SEC investigations, and remediate any shortcomings.  Chair Gary Gensler, who recently announced he will step down at the start of the next Trump presidency, described the Enforcement Division as a “steadfast cop on the beat.”  Set forth below are key highlights on enforcement trends from the past year, as well as predictions for what the next year may hold under a new administration.Continue Reading SEC FY 2024 Enforcement Results: Record Dollars But Many Fewer Cases

On October 25, 2024, the Securities and Exchange Commission (“SEC”) adopted amendments to certain rules in the Covered Clearing Agency Standards (the “Amendments”) aimed at improving risk management and resilience of covered clearing agencies (“CCAs”).  Although not directly relevant to firms who are participants in one of the clearing agencies, the amendments could result in changes to margin requirements imposed by clearing agencies.  The Amendments:Continue Reading Clearing Agency Participants Take Note: Covered Clearing Agency Resilience Rules Could Bring New Margin Requirements

On September 18, 2024, the Securities Exchange Commission (“SEC”) unanimously adopted new rules amending Regulation NMS (the “Amendments”). The Amendments (1) establish new minimum pricing increments (or “tick sizes”) for certain stocks priced above $1.00, (2) establish a new maximum fee for access to quotations, and require that all such fees be calculable as of the transaction date, and (3) accelerate the implementation of operational amendments to the “round lot” and “odd-lot information” definitions previously adopted to harmonize with the adopted NMS amendments.Continue Reading The Next Market Structure Rule Arrives: SEC Adopts New Minimum Pricing Increments and Access Fee Caps

In the past few weeks, the Securities and Exchange Commission (“SEC”) has announced three settled enforcement actions alleging violations of the internal controls provisions of the federal securities laws.  The cases are notable less for the SEC penalties involved—which ranged from no penalty to $400,000—but rather for the other, more dire consequences the companies experienced as a result of internal controls failures, such as financial restatements, delayed SEC filings that led to an exchange delisting, and serious employee misconduct that went unchecked.  The cases underscore the importance of establishing and maintaining effective systems of internal control over financial reporting. Continue Reading Trio of SEC Enforcement Actions Underscores Importance of Internal Controls, Including in M&A Context

Last week brought Securities and Exchange Commission (“SEC”) enforcement developments that, in our view, demonstrate the SEC’s interest in pursuing cases against investment advisers for conduct that would have been restricted under the Private Fund Adviser Rules (“PFAR”) and that the SEC stated in the PFAR adopting release was inconsistent with advisers’ fiduciary obligations.  As expected – and as previewed in our Client Alert on the Fifth Circuit’s decision in June – the SEC clearly still intends to act on the same concerns it raised in PFAR and will use its examination and enforcement tools to scrutinize the same adviser practices that drove the rulemaking.Continue Reading SEC Enforcement Updates – Post-PFAR Developments

What’s next after PFAR? In its highly-awaited June 5th opinion, the Fifth Circuit Court of Appeals vacated all of the SEC’s Private Fund Adviser rules (“PFAR”), agreeing with industry trade associations that the SEC lacked the necessary statutory authority to adopt PFAR. In our latest Client Alert, we examine the opinion, aspects of…