Recapping 2025
Fiscal year 2025 closed with significantly fewer SEC enforcement actions and reduced monetary sanctions. This is the result of a variety of factors, including the reduction in SEC staff and shifting priorities toward pursuing more traditional fraud cases. While most areas saw declines, insider trading and market manipulation actions increased compared to FY 2024. In reviewing the agency’s actions, speeches, and structural changes, several key themes and trends emerge:
Back to basics: fraud-centric enforcement. Across FY 2025, the Commission emphasized “bread and butter” priorities: insider trading, accounting and disclosure fraud, market manipulation, and advisers’ fiduciary breaches. This renewed focus aligned resources with investor harm and core misconduct rather than expansive thematic sweeps.
Renewed openness to engagement and cooperation. Staff encouraged early conversations with companies that self-identified problems, reviving the practical value of Wells meetings, and elevating remediation.
Individual accountability and cross-border risks. Insider trading actions spotlighted global coordination, encrypted communications, and media-leak tactics, underscoring that geography and technology complicate – but do not shield – misconduct. The SEC’s lens remained tight on culpable individuals and foreign actors.
Social media as a venue for fraud: same rules, new forum. Enforcement applied traditional anti-fraud principles to modern platforms, reinforcing that truthfulness and disclosure obligations apply regardless of medium.AI and emerging tech: representations, controls, and oversight. The SEC took a technology-neutral stance while urging registrants to ensure accurate claims about AI use and to validate compliance tools. Firms were cautioned to examine data provenance, third-party integrations, consent requirements, and security gaps as their products embed AI features.
AI and emerging tech: representations, controls, and oversight. The SEC took a technology-neutral stance while urging registrants to ensure accurate claims about AI use and to validate compliance tools. Firms were cautioned to examine data provenance, third-party integrations, consent requirements, and security gaps as their products embed AI features.
Crypto policy pivot from regulation-by-enforcement to framework-building. The year marked a notable shift in the world of crypto regulation: approval of spot Bitcoin ETFs, the formation of a Crypto Task Force to craft registration and disclosure pathways, and the repeal of SAB 121 via SAB 122, all of which appear aimed at enforcing sensible guardrails while preserving investor protection.
Remedies and sanctions: narrow tailoring over blanket bans. Courts and staff articulated a more nuanced approach to penny stock bars, emphasizing proportionality and forward-looking risk. This reevaluation aligned sanctions with conduct, compliance posture, and likelihood of recurrence rather than defaulting to permanent prohibitions.
What to expect in 2026
We anticipate the SEC to focus on the following in the new year:
Continued emphasis on fraud, insider trading, and manipulation. Expect steady pursuit of schemes with clear investor harm, particularly where social‑media promotion, microcap activity, or cross‑border trading suggests manipulation risk. Individual accountability will remain central.
Heightened oversight of foreign‑based issuers and gatekeepers. The cross‑border task force is poised to scrutinize disclosure quality, trading anomalies, and the role of auditors, underwriters, and dealers in bringing foreign issuers to U.S. markets.
Crypto rulemaking over litigation. We are now in the post-regulation-by-enforcement era for crypto. With market‑structure legislation advancing in Congress and a stated agency preference for principled frameworks, we anticipate guidance, rule proposals, and targeted fraud‑and‑manipulation cases rather than expansive status‑classification litigation. Coordination with the Commodity Future Trading Commission will remain important as tokenization and market‑structure questions evolve.
AI disclosure and controls as an examination baseline. Expect Examinations to test governance assertions around AI use in compliance, trading, marketing, and customer interactions, with referrals where claims outpace controls or where data governance and model‑risk documentation are lacking.
Remedies aligned to remediation. Cooperation, timely self‑reporting, investor remediation, and credible control enhancements will continue to influence charging and sanctions decisions, particularly in lower‑harm or first‑offense scenarios.
Practical action items for in‑house counsel and corporate leaders
To stay ahead of 2026 priorities, in-house counsel and corporate leaders should focus on the following:
Elevate fraud‑risk controls and surveillance. Reassess insider‑trading controls, market‑manipulation surveillance, and social‑media monitoring. Refresh restricted‑list governance, material non-public information access mapping, data‑loss prevention controls, and test alert‑to‑escalation workflows and documentation.
Fortify disclosure governance. Pressure‑test disclosure controls and procedures around regulatory interactions, operational setbacks, and product claims. Ensure Audit Committee visibility into high‑variance judgments and remediate any identified control gaps with concrete timelines and owners.
Prepare for cross‑border scrutiny. For foreign affiliates and cross‑listed entities, verify the accuracy of foreign private issuer status determinations, align home‑country compliance elections with actual practice, and audit gatekeeper performance and representations. Establish a playbook for trading suspension or manipulation inquiries.
Align AI assertions with evidence. Inventory AI‑related statements in filings and marketing, validate each claim against documented capabilities, and memorialize model governance, testing, vendor diligence, and data‑provenance controls. Avoid aspirational language that could read as “AI‑washing.”
Refresh cooperation posture. Update internal investigation protocols to prioritize prompt scoping, investor remediation, and early engagement where appropriate. Capture remediation milestones contemporaneously to support tailored remedies and negotiated outcomes.
Calibrate crypto exposure. For issuers and intermediaries with digital‑asset touchpoints, map activities to expected rulemaking trajectories and congressional proposals. Emphasize market‑integrity, custody, disclosure, and conflicts‑management fundamentals irrespective of ultimate jurisdictional outcomes.
Collectively, 2025 recentered the SEC on core investor-protection mandates while modernizing engagement, technology oversight, and crypto policy, and we anticipate this to continue in the new year. Companies that invested in accurate disclosures, proactive remediation, and credible governance weathered scrutiny best, proving that in an evolving regulatory landscape, fundamentals still matter most. Looking forward, companies that use this time to double down on fraud‑risk controls – with a focus on detecting and fixing fraud themselves first, disciplined disclosure processes, and credible AI governance – will be best positioned for the year ahead.
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