The deep staff cuts and policy changes of Donald Trump's second presidential term upended the enforcement division of the Securities and Exchange Commission.
New case filings fell by half, and the president pardoned a long list of convicted securities violators and inside traders. Director of the Division of Enforcement Margaret Ryan resigned in March-just six months into her job-after the agency dismissed civil fraud charges against a cryptocurrency entrepreneur who was an early investor in Trump family crypto ventures and coins.
But turmoil in the enforcement division seems to be settling down since the April appointment of David Woodcock as director. A former auditor and SEC regional director, the 58-year-old Woodcock visited every agency office and specialty unit in his first 100 days.
Woodcock says the agency is taking an approach to enforcement that prioritizes fighting financial fraud, insider trading, market manipulation, and harm to retail investors. It may file fewer cases against companies and more cases against individuals who work there.
"Our focus is finding the wrongdoers, and where we find the wrongdoers are individuals, we want to bring that accountability," Woodcock tells Barron's.
He's hiring. In early August, Woodcock announced a new financial reporting and accounting unit whose experts will target crooked accounting and lax auditing. The mood is improving in the enforcement division and the wider compliance community.
"I've met with hundreds of people, and I would say that morale right now is probably pretty good," says Woodcock. "The people here want to focus on the mission."
Enforcement's mission has long been clear: to protect investors from investment fraud, whether it be old-fashioned deception, insider trading, or some new kind of financial manipulation. Cases begun under one administration were passed like batons to the next. That remained true in Trump's first term and when Gary Gensler chaired the SEC under President Joe Biden.
Trump's second term has been different. Within months, overall SEC staff shrank by 18%, according to a recent tally by the U.S. Government Accountability Office. Enforcement ranks fell by 20%.
Cases were voluntarily dismissed, in what Chairman Paul Atkins said was a "back to basics" correction from what he called "regulation by enforcement" by Gensler. Many of the dropped cases involved the failure of crypto businesses to register under securities laws.
"There's been a wholesale reversal unprecedented in the 30 years I've practiced," says Marc Fagel, a former SEC regional director who teaches at Stanford Law School. "I can't think of any examples where a new SEC administration came in and wholesale just dropped cases that had already been voted on, approved, and instituted. That is incredibly novel and frightening."
The SEC brought 456 civil cases and administrative proceedings in the fiscal year ended in September 2025-the lowest in 20 years and far below the two-decade average of about 700. In the report, Atkins said he was emphasizing quality over quantity, and he knocked Gensler for "running up numbers" to get headlines.
Disgorgements and civil penalties in fiscal 2025 fell by a third, year over year, while moneys returned to harmed investors fell by a quarter.
Those numbers overstated the Trump agency's activity. Almost half of fiscal-2025's SEC cases had been initiated under Gensler, notes the investor advocacy group Better Markets. Adjusted for that, the pace of enforcement under Trump was less than 30 new cases a month, compared with about 60 a month under all the presidents since Bill Clinton.
Ben Schiffrin, the policy director at Better Markets, called it "the SEC's retreat from its traditional mission of investor protection."
Updating the counts for the first half of the current fiscal year through March 2026, researchers noticed another shift. The SEC filed five actions against public companies during that period, compared with an average of 30 during the nine preceding years' first halves, according to a study by New York University's Pollack Center for Law & Business and the economic consulting firm Cornerstone Research. Since March, by Barron's count, there have been only a couple of more cases that name public companies as defendants.
That shift reflects the current leadership's de-emphasizing of so-called "books and records" cases, like the big settlements obtained by Gensler's SEC from banks whose traders texted with their personal phones.
It also reflects Atkins' announced emphasis on holding individuals accountable for wrongdoing. The law firm Gibson Dunn found that two-thirds of the SEC's fiscal-2025 actions named at least one individual, a 27% increase over 2024.
Gibson Dunn's report credited the Atkins regime with a number of advances. Whistle-blower awards have increased sharply. For the first time in a decade, the enforcement division revised its manual to improve transparency and formalize procedures for investigations and for evaluating cooperation by defendants. The SEC committed to harmonizing its regulations with the Commodity Futures Trading Commission, and joined that agency in a memo on how securities laws apply to crypto assets and transactions.
Enforcement activity seems to be quickening, Gibson Dunn observed, with new cases increasing each month. The kinds of cases are those that Atkins promised to prioritize: accounting and disclosure fraud, private fund abuses, cross-border misconduct, and retail-facing fraud.
There have been a handful of crypto fraud cases. In December, the SEC sued a half-dozen firms that it alleged were using social media and investment tips generated by artificial intelligence to lure investors into opening accounts for crypto tokens that didn't actually exist. The defendants haven't yet appeared in court or answered the allegations.
"We're not ignoring crypto," says enforcement director Woodcock. "Some of the cases we've brought recently highlight that fraud is fraud, and we're going to go after it no matter what."
While the division talks of sticking to the basics, it has also launched a number of new initiatives. Responding to a wave of China-based penny stock promotions on Nasdaq, the SEC formed a cross-border task force in September. Since then, the group has halted trading in 15 stocks that show evidence of social-media touting and pump-and-dump trading manipulation.
Woodcock says that his financial reporting and accounting unit is hiring actively, and should be fully staffed in a month or two.
That accounting project has lots of fans among the former SEC staff members who spoke with Barron's.
"You know how much havoc some of these big corporate accounting fraud scandals can do to the investing public. It's important for the commission to focus on those types of cases," says Dan Hayes, a former SEC trial attorney now practicing in the Chicago office of Venable.
In July, Woodcock's enforcement division announced a retail fraud working group to build cases against those preying on small investors.
Woodcock has hired a number of high profile deputies, including Osman Nawaz as second in command. Nawaz previously spent more than 14 years in the enforcement division.
It is too soon to know how the September-2026 fiscal-year case counts will end. The last month of each fiscal year tends to see a rush of cases filed, says Haimavathi Marlier, who co-chairs Morrison Foerster's securities enforcement practice and is a former SEC trial attorney.
For all of the turmoil of the past 18 months, plenty of talented people stayed at the division.
"I can attest firsthand because we're across from them almost every day," says Tom Bednar, a Cleary Gottlieb lawyer who spent 13 years as prosecutor and SEC attorney. "There's a lot of brains left at the SEC."
Woodcock concurs. "We have an incredibly talented staff," says the enforcement director. "We have a clear mission, and we're in a good place right now."
Comments