SEC Shakeup Renews Dispute Over Wall Street, Crypto Enforcement

The abrupt departure of the SEC’s enforcement chief is stirring speculation about who will serve as its next top cop, adding to scrutiny over plunging enforcement numbers and cases dropped against crypto defendants tied to President Donald Trump.

The Securities and Exchange Commission is confronting the latest gap in its ranks after Margaret Ryan stepped down as enforcement director March 16, less than seven months into the job. Her short tenure overlapped with an exodus of employees out of the enforcement division—an 18% cut through voluntary buyouts and other departures in fiscal 2025, according to a new report from the Government Accountability Office.

She’s also exiting as SEC Chairman Paul Atkins finds himself under fire from Sen. Elizabeth Warren (Mass.), Rep. Maxine Waters (Calif.), and other Democratic lawmakers who say the agency dropped its case against billionaire Justin Sun after he bought Trump family cryptocurrencies, while abandoning other Biden-era actions.

“You can say as a matter of policy, ‘we don’t want to prioritize these cases or advance certain legal theories,’ but these were cases that the commission filed in good faith,” said Marc Fagel, a lecturer at Stanford Law School who served as regional director and head of enforcement for the SEC’s San Francisco office. “Enforcement is not supposed to be partisan.”

Atkins says the enforcement division is on a “course correction” after the Biden administration, telling the crowd at the SEC Speaks conference in Washington this month that his staff will no longer prioritize “volume over real investor protection.”

Instead, Atkins touts the agency’s work on insider trading, affinity fraud, and Ponzi schemes, focusing on defendants who “lie, cheat, and steal.”

Narrower Focus

Atkins and acting enforcement chief Sam Waldon have also brushed aside reports from Cornerstone Research and others indicating new SEC actions against public companies and financial recoveries from fraudsters under Trump-appointed leadership are at their lowest levels in at least a decade.

“I’ve never thought that those are particularly good ways of evaluating the effectiveness of an enforcement program,” Waldon said at SEC Speaks. “I know that Chairman Atkins does not.”

But the narrower enforcement focus—along with an SEC policy requiring commissioners to sign off on any subpoena orders—could limit the talent pool for a new enforcement director.

“This is a commission that’s clearly not going to be doing anything terribly creative or interesting in enforcement, and if you’re an accomplished securities lawyer, do you want to give up your career to lead a division that’s going to be bringing Ponzi scheme cases?” Fagel said.

An SEC spokesperson in a statement acknowledged that debate is common within the agency’s ranks, but stressed that votes on enforcement matters are made by commissioners based on facts, law, and policy, rather than politics.

“The SEC is equipped with the staff and resources necessary to fulfill the agency’s important mission,” the SEC spokesperson said, and staff departures are opportunities for new talent to join the agency, with Atkins working to address hiring needs in a timely manner.

‘Not Going to Happen’

Some securities lawyers and former SEC staff defended Atkins’ narrower approach to enforcement and downplayed concerns about turnover.

Peter Chan, a former SEC assistant regional director in Chicago who’s now a partner at Baker McKenzie, said he sees the division maintaining flexibility to pursue a wide array of cases.

“Even though lying, cheating, and stealing is the priority, they’re not going to ignore non-fraud violations if people have had opportunities to clean things up and they fail to do so,” Chan said.

“It actually takes more resources to investigate intentional fraud, because you’re talking about the type of people who take active steps to conceal the fraud and misconduct,” he added.

Waldon also alluded to the agency’s focus on fiduciary breaches, evidenced by a spate of six adviser enforcement actions filed concurrently in late 2025.

“My caution is that you see some headlines saying, ‘if it’s not intentional fraud, don’t worry about it,’ but that is the furthest from the truth, based on what we are hearing and consistent with some of the cases,” Chan said.

Others questioned whether private plaintiffs or states are equipped to pick up any slack left by a scaled-back SEC enforcement unit, especially after its pullback on crypto-related actions.

“If you’re talking about a case that’s novel or without a lot of precedent, there’s risks to the plaintiffs’ bar, which is working on a contingency fee,” Fagel said. “So I think they’ll pick up some of the slack, and I think state attorneys general will take up some of this, but I think a lot is just not going to happen.”

Building ‘Confidence’

Ryan, a former marine and senior judge in the US Court of Appeals for the Armed Forces, was widely seen as an unusual pick for the SEC enforcement post, as her predecessors typically hailed from white-shoe law firms or had experience bringing securities cases.

“There’s never been an enforcement director who had so little connection to SEC enforcement or government prosecutions,” Fagel said. “It’s hard to imagine they do that again.”

Chan, the SEC Chicago alum, echoed the call for a securities veteran to helm the enforcement unit.

“Finding someone who is very knowledgeable about the SEC’s enforcement program and the history of it is important, not just to build confidence in the markets, but really to build confidence with the staff,” he said.

But Ryan’s appointment last year was of a piece with the SEC’s broader enforcement posture under Atkins, signaling a break from orthodoxy that many regulated business have welcomed, according to Jonathan Shapiro, a partner at Goodwin Procter who specializes in securities fraud enforcement.

“This is an administration that’s been defined by out of the box choices,” he said. “If you can get comfortable with the notion that we need to change the revolving door of insiders who have been running enforcement for decades, another outsider could be excellent.”