SEC enforcement actions drop 57 percent
According to the Brattle Group, the Securities and Exchange Commission initiated 308 enforcement actions during fiscal year 2026, a figure that represents a 57% drop from the eight-year average starting in 2018. This reduction was driven by various factors, such as changes in agency procedures and limited staffing levels.
Both workforce cuts at the SEC and the prolonged government shutdown contributed to the slowdown in enforcement activity last year, as noted by the Brattle Group. Within the total number of actions, insider trading cases made up the largest segment since 2018, comprising 12.3% of the total.
Flawed securities offerings and delinquent filings were the most common types of allegations, the Brattle Group reported. Jan Jindra, a Principal at the Brattle Group, observed that the enforcement environment was influenced by the shutdown, staffing shortages, and a shift in leadership for the Enforcement Division.
After assuming the role of SEC chairman in April 2025, Paul Atkins altered the division’s direction, concentrating on fraud and abandoning what he described as “regulation by enforcement” under Gary Gensler. Atkins stated that the SEC has “redirected resources toward the types of misconduct that inflict the greatest harm, particularly fraud, market manipulation and abuses of trust, and away from approaches that prioritized volume and record-setting penalties over true investor protection.”
Consistent with Atkins’ strategy, enforcement actions against individuals rose during the first half of fiscal year 2026 relative to previous periods. However, the rate of actions targeting individuals declined in the second half but remained within the upper range of historical data.
The Brattle Group indicated that staff reductions and the long government shutdown played a role in slowing enforcement during fiscal year 2026. Data from the Government Accountability Office shows that the agency reduced its workforce by 18% through September 2025.
Additionally, the SEC introduced “significant updates” to its enforcement manual, which includes alterations to the Wells process that enable entities to present their case to the agency before a formal charge. The pace of enforcement was also affected by leadership transitions, specifically the resignation of Margaret Ryan as enforcement director in March 2026 and the appointment of David Woodcock in May.
