April 21 marked the one-year anniversary of the swearing in of SEC Chairman Atkins, and the SEC has clearly set the tone for the agency’s focus as described in his speech on the anniversary date. The speech and the first examination priorities report (Priorities Report) issued under the new administration highlight the SEC’s key priorities related to examinations of investment managers.

The SEC has continued to bring enforcement actions against registered entities, and in announcing its enforcement results for fiscal year 2025, clearly set forth its current focus, providing that: “Going forward, enforcement priorities and results will be linked to the Commission’s and the Division’s core mandate, and will thus contemplate the following elements to fulfill its mission: Standing up to fraud in its many forms and those market participants engaged in such misconduct; addressing the fraudulent and manipulative conduct of the parties in question through appropriate remediation; and repaying investors’ losses when harmed.”

Chairman Atkins stated, “[The SEC has] redirected resources toward the types of misconduct that inflict the greatest harm: particularly fraud, market manipulation, and abuses of trust.”

Exams target disclosure by advisers 

The Priorities Report indicates that the Examination Division will continue to prioritize investment adviser compliance with fiduciary standards, emphasizing the duty of care and loyalty owed to clients, especially retail investors. While the Priorities Report does not devote a section specifically to advisers to private funds, it mentions a focus on alternative investments, including funds with extended lock-up periods, complex products such as option-based ETFs, and high-cost investments. It also emphasizes a focus on disclosure of fee-related conflicts that may arise from certain compensation structures relevant to private funds.

Failure to disclose material conflicts of interest has been a focus of SEC enforcement actions during Chairman Atkins’ tenure.

• In July 2025, the SEC announced that it had settled charges against an investment adviser that breached its fiduciary duties by failing to disclose that its affiliated broker-dealer applied undisclosed fee markups, misleading clients into believing that an unaffiliated clearing broker determined various fees. The SEC also charged the adviser with overbilling certain clients by imposing advisory fees on alternative investments when the clients’ advisory agreements did not allow for such fees and with violating the books and records provisions because it had backdated annual compliance review documents.
• In a proceeding announced March 23, 2026, the SEC charged an investment adviser with breaches of its fiduciary duty for, among other things, failing to fully disclose material facts about certain accounts, including allocation of cash, and misstating its investment methodology in certain “robo-advised” accounts. The SEC charged the adviser with failure to disclose that it had a conflict of interest in setting an allocation for certain “no fee” accounts because the allocation percentage was selected, in part, to generate a financial benefit for the adviser’s affiliates, allowing the affiliated broker-dealer and its affiliated bank to make up for the revenue the adviser lost from not charging an advisory fee.
• And in an action announced February 25, 2026, the SEC charged an adviser with breaching its fiduciary duty when selling loans it originated to the private funds it managed without pricing the loans at fair market value and in breach of the disclosure in the funds’ disclosure documents.

The SEC in September 2025 announced that it was charging an investment adviser with violating the Compliance Rule (Advisers Act Rule 206(4)-7) for failing to implement compliance policies and procedures regarding record-keeping and its annual review of its compliance program.

• We expect that the SEC will continue to review advisers’ compliance programs, focusing on whether the policies and procedures are tailored to the entity’s specific operations, and whether they are appropriately implemented.

Marketing Rule compliance 

In December 2025, the Examination Division released a Risk Alert (the Marketing Rule Alert) on registered investment advisers’ compliance with the Marketing Rule (Investment Advisers Act of 1940 Rule 206(4)-1), indicating that marketing practices would also be a focus in SEC exams.

We expect that the SEC will continue to examine advisers for compliance with the Marketing Rule, particularly in the two areas flagged in the Marketing Rule Alert – the use of testimonials and endorsements, and third-party ratings provisions. The Examination Division observed that advisers frequently failed to provide necessary disclosures when a testimonial or endorsement was circulated. Requirements include “clear and prominent disclosures” about the status of the person providing a testimonial or endorsement, whether such person was a current client or fund investor, whether that person received cash or non-cash compensation (including the nature of any such compensation), and whether that person had a material conflict of interest (such as an ownership interest in, or sub-advisory relationship with, the adviser).

The Examination Division also focused on investment advisers’ use of third-party ratings and on the failure on the part of certain investment advisers, when using such ratings, to diligence the reliability of third-party ratings reports, to clearly and prominently communicate the date of any such reports, and to communicate whether the third-party ratings involved the payment of any cash or non-cash compensation. As with testimonials and endorsements, the Examination Division criticized the use of hyperlinks and/or smaller, lighter fonts when providing these necessary disclosures, as well as instances in which the disclosures did not immediately accompany the provided ratings.

Other focus areas: Systems and data security, AI, and anti-money laundering

With the rise in cybersecurity threats and operational disruptions, the SEC indicated that it would focus on the protection of investor information and business continuity. Examinations will focus on governance practices, data loss prevention, access controls, incident response-and-recovery procedures, and ransomware preparedness.

The Examination Division indicated that it will prioritize review of registrants’ progress in compliance with amendments to Regulation S-P, which requires registered entities to have policies and procedures to prevent data breaches. Compliance dates are December 3, 2025 for larger entities and June 3, 2026 for smaller entities, according to the SEC.

The Examination Division will continue to assess compliance with Regulation S-ID, including reviewing registered entities’ written Identity Theft Prevention Programs. Programs must be reasonably designed to uncover red flags as well as the nature and extent of training on such programs.

The SEC is also closely monitoring the rise of AI, automated investment tools, and trading algorithms. The Examination Division will also continue to examine the extent to which registrants’ anti-money laundering programs are tailored to the specific risks associated with a firm’s business model, including reviews of foreign accounts and beneficial ownership, and will review compliance with the U.S. Department of the Treasury’s Office of Foreign Assets Control sanctions regime.

Get ready now

This year, registered entities should focus on 1) reviewing and updating conflict disclosures; 2) ensuring that testimonials, endorsements, and third-party ratings comply with the Marketing Rule; 3) implementing updates for AI oversight and Regulation S-P amendments; and 4) updating cybersecurity policies and ensuring that firm personnel are trained to identify and respond to threats.