SEC Zeroes in on Insider Trading and Offering Fraud Under Atkins

The SEC has pared back enforcement since a new administration took over nine months ago, slashing new lawsuits by over a quarter with Trump-appointed leaders at the helm.

Chairman Paul Atkins has made clear attempts to distinguish his tenure from Biden-era Chair Gary Gensler, focusing on investor harm and outright fraud over corporate infractions related to registration or disclosure.

The narrower purview yielded 28% fewer litigated enforcement actions through September compared with the same period last year, according to Bloomberg Law’s review of Securities and Exchange Commission records.

SEC enforcement from President Donald Trump’s Jan. 20 inauguration through the end of fiscal 2025 focused on Ponzi schemes, offering fraud, and insider trading, matching Atkins’ stated goal to pursue traditional securities law violations.

“What we have seen is definitely a focus on intentional misconduct, and all the different forms that it takes,” said David Peavler, a partner at Jones Day who also served as regional director and head of enforcement at the SEC’s Southwest office, serving in various roles at the agency across two decades spanning both Republican and Democratic administrations.

“The largest volume of that has been offering fraud and insider trading cases,” Peavler said. “If you look at the numbers of those as a percentage of cases since January, they’re well above historical norms.”

Meanwhile, the SEC has retreated from crypto-related litigation after dropping virtually all those Gensler-era enforcement actions in the first half of the year, with a few notable new filings against alleged fraudsters who used digital assets in Ponzi-like schemes or purported securities offerings.

“They continue to demonstrate a less harsh view of crypto, and more willingness to work with the industry providing guidance and guardrails,” said Grant Fondo, a partner and co-chair of the digital currency and blockchain practice at Goodwin Procter LLP.

“The bar has risen a little bit about what they think is worth pursuing,” he said.

An SEC spokesperson said in an email that the agency is unable to comment due to a lapse in appropriations during the government shutdown.

‘Bread-and-Butter’ Fraud

The SEC brought at least 91 new enforcement suits from Inauguration Day through the end of September, down from 126 actions filed during the same period in 2024, according to Bloomberg Law’s review of agency litigation releases and filings.

The overall drop comes as Atkins’ enforcers focus more on individual offenders than household name companies.

“The types of entities that have been under scrutiny in the Atkins administration have been SEC registrants, registered investment advisers, and broker-dealers,” said Haima Marlier, a partner at Morrison & Foerster LLP and former senior trial counsel at the SEC.

Nearly 33% of enforcement actions brought under this administration so far have focused on offering fraud or insider trading, up from 26% during the same period last year.

“People perceive the Gensler administration as having gone into a lot of areas that were not real fraud, like the off-channel communications cases that were a huge dollar generator,” Peavler said, referring to a crackdown on Wall Street’s use of unofficial communications tools such as WhatsApp.

“If you look back at the cases brought over this fiscal year, there are cases that involve digital assets, but they also involve that bread-and-butter fraud, which often leads to the agency not needing to make a determination as to whether the asset itself is a security,” Marlier said.

The lawsuits in recent months are landing as the agency’s ranks of enforcement attorneys experience significant attrition. The SEC is one of many federal agencies that slashed headcounts by offering buyouts and voluntary separation options to career enforcers.

“We are going to learn a lot more in the next six months than we did in the last, and that’s because they now have a permanent director of enforcement,” Peavler said, referring to the SEC’s new enforcement chief, Meg Ryan. “Once you’ve cleared those initial growing pains, the fork in the road memo, and a wild card with the government shutdown, I do think we will have a better sense.”

Keeping Up Compliance

The SEC’s appetite for going after individual alleged fraudsters and clear instances of perceived wrongdoing doesn’t mean powerhouse public companies should relax their compliance programs.

“There’s a premature assumption that clients aren’t focused on compliance, but they have to be, because it’s not just the SEC,” Marlier said. “Public companies are also still laser focused on compliance because there are powerful state regulators that can launch investigations that are just as similar and intrusive and expensive as the SEC investigations.”

There’s also private litigation. High-dollar securities class action suits boomed in the first half of 2025, with emerging technologies such as artificial intelligence and volatile markets fueling a surge of new cases.

But an SEC shift making it easier for companies going public to force securities fraud claims into arbitration—which Atkins touted as “eliminating compliance requirements that yield no meaningful investor protections”—poses a threat to class actions as a venue for many securities claims that the regulator has shied away from pursuing itself.

The SEC is poised to boost the volume of new cases now that Atkins has tapped Ryan, a former military judge, attorney, and Supreme Court clerk, as enforcement director. But it remains to be seen how much the enforcement unit can make up for this year’s downturn.

“New administrations lead to those kinds of changes,” Peavler said. “I went through four of them when I was at the SEC, and every time you’d have this period of transition where enforcement numbers dropped.”