Warn Former General Counsels: SEC Enforcement Won't Vanish Under Chairman Paul Atkins

SEC Chair Paul Atkins was inaugurated last week. and will preside over a newly constituted SEC after a flood of departures due to DOGE. The rule-making agenda is likely to see significant shifts, experts said, but Atkins is no shrinking violet when it comes to enforcement actions.

Out of the past four SEC general counsels, three are forecasting that enforcement priorities will change position, but won’t vanish with new ones sworn-in Chairman Paul Atkins leading the agency.

Last week, Atkins assumed his position as the head of the main federal agency overseeing U.S. securities markets; however, this role is not his first time at the Securities and Exchange Commission (SEC). From 2002 to 2008, Atkins was a commissioner, and he has been recognized as crypto enthusiast , and previously managed up to $6 million worth of cryptoassets. Despite market observers anticipating more lenient regulation due to President Trump’s emphasis on pro-business policies, it should be clear that enforcement actions aren’t diminishing with Atkins at the helm, as forecasted by Melissa Hodgman, who was once one of the longest-serving senior officials within the SEC Division of Enforcement.

Hodgman notes that Atkins' comments about enforcement usually focus on several main points. She mentioned, speaking last week, that issues such as fraud—covering both accounting and disclosure—and insider trading are expected to receive significant attention. Berkeley Spring Symposium on Mergers & Acquisitions and Corporate Boards .

Hodgman currently works as a partner at the law firm Freshfields after spending approximately 16 years with the SEC’s enforcement division. She cautioned attendees that attorneys must remain vigilant regarding how top executives and board members trade securities when they possess significant unpublished information, since regulators have grown "exceptionally skilled" at uncovering connections in insider trading cases using social media and artificial intelligence technologies.

They leverage data and analytics in a manner that wasn't part of my tenure there," stated Hodgman. "This enforcement division will be highly concentrated on that aspect.

In other instances of enforcement actions, the agency might observe a change in the types of regulatory infractions presented to the commission, said three former SEC general counsels who were part of a panel discussion moderated by Hodgman.

Robert Stebbins, who served as the SEC's general counsel from 2017 to 2021 during President Donald Trump's first term under Chairman Jay Clayton, forecasted that enforcement would revert to the standards set during Clayton’s leadership.

This implies a concentration on "Main Street" or individual retail investors, as mentioned by him. Additionally, Stebbins pointed out that there won’t be any enforcement of the Foreign Corrupt Practices Act this time. The Trump administration halted FCPA enforcement back in February. executive order that it hindered America's economic competitiveness.

Dan Berkovitz, who served as general counsel during Former Chairman Gary Gensler’s tenure from 2021 to 2023, stated that enforcement actions would prioritize instances of investor harm over technical rule breaches.

Similarly, Megan Barbaro, who served as general counsel from 2023 to 2025 under Gensler, indicated that enforcement actions may aim for reduced corporate penalties. This adjustment could be due to the commission's heightened worry that substantial fines levied against corporations might indirectly adversely affect shareholders.

I anticipate observing reduced financial figures in these instances," stated Barbaro, concurring with Berkovitz’s view on decreased fines. "The emphasis will shift towards combating fraud, with less attention paid to breaches of policies and protocols.

In 2024, the SEC initiated 583 enforcement actions and collected over $8 billion in penalties. Although this represents a decrease of 26% in case numbers, the total fine amount reached as high as $8.2 billion, marking the largest sum ever recorded. SEC history . Ex-chair Gensler faced criticism from companies due to his extensive regulatory plans and also drew opposition from fellow Commissioner Hester Peirce who called In some instances, Gensler’s strategy toward cryptocurrency involves "enforcement-based regulation."

In this regard, all three previous lead counsels expressed their belief that the SEC under Atkins will likely tackle cryptocurrency regulation, despite it being a "delicate" subject, according to Stebbins.

On his fourth day as chairman, Atkins spoke During the third meeting of the SEC’s recently established Crypto Task Force, Atkins acknowledged Peirce in his comments, referring to her as "CryptoMom."

Regarding regulatory procedures, the agency could potentially take formal action on environmental disclosures as well, according to Stebbins.

In March 2024, the Securities and Exchange Commission adopted final rules mandating fresh reporting requirements for publicly traded firms concerning their direct and indirect greenhouse gas emissions. These regulations promptly encountered significant legal challenges. Following President Trump’s victory in the 2024 election, acting SEC Chairperson Mark Uyeda declared the commission chose not to continue defending the climate-risk disclosure regulation in court anymore.

Berkovitch mentioned that alongside cryptocurrency, regulations might also concentrate on increasing accessibility to private markets and enhancing oversight. accredited investor threshold .

The SEC previously tackled the limit in 2020. expanding the definition Of investors and companies capable of investing in private equity, hedge funds, venture capital, and pre-IPO shares.

The tale was initially showcased on Cryptonesia