There have been a lot of developments at the Securities and Exchange Commission since Chair Gary Gensler resigned on January 20 during President Trump's inauguration. Among the developments:
- The Commission created a new Crypto Task Force;
- The SEC Staff published guidance curtailing the scope of shareholder proposals;
- Acting Chair Uyeda instructed the SEC Staff to review regulatory efforts in a variety of areas, from Crowdfunding to Emerging Growth Companies' reporting obligations;
- The SEC ended litigation against Coinbase and closed an investigation regarding cryptocurrency sales practices against Robinhood; and
- The SEC announced enforcement actions against an investment adviser defrauding retail investors.
Most of those are groundbreaking, but the last one is just part of the SEC's ordinary mission of being a “cop on the beat” of financial institutions.
In a recent speech, Acting Chair Uyeda acknowledged the historically recognized tension between the Trump Administration's goal of “democratizing” investment opportunities and the Congressionally mandated goal of protecting investors from fraud.
And even in an unabashedly pro-cryptocurrency and digital asset administration, on February 26, 2025, the SEC announced that it had obtained partial summary judgment and a final judgment against a cryptocurrency sponsor who made false statements of fact during a 2017 initial coin offering, including by saying that the offering was regulated by the SEC and was compliant with the federal securities laws.
All the policy changes at the SEC are still playing out. However, the SEC is still continuing the important work of investor protection and being the “cop on the beat” of Wall Street. Toward the end of Gary Gensler's chairmanship of the SEC, there were calls that the SEC's enforcement actions had shifted from pure investor protection to prosecuting ministerial violations of the federal securities laws, such as recordkeeping violations. While we expect enforcement priorities to change, recent actions do show that the SEC is continuing its mandate of investor protection and providing pathways for businesses' capital needs.
We continue to monitor these shifting priorities, as well as priorities at FINRA and other self-regulatory organizations, to keep clients informed of key trends in enforcement and regulation.
