Securities Enforcement Forum West 2025: Embracing Change in the SEC’s New Chapter

Key Takeaways

• A return to traditional enforcement priorities is likely forthcoming under the new administration, with a shift away from creative and aggressive enforcement toward more “bread and butter” matters.
• Recent DOJ guidance will likely have an impact on parallel proceedings and can shed light on the types of cases likely to be at the forefront of the enforcement agenda.
• Expect significant changes in the Commission’s view of crypto as it crafts a regulatory framework.
• A continued focus is anticipated on cybersecurity, AI, and emerging technologies, with increased emphasis on fraud rather than internal controls violations.
• Recent tariffs may need to be considered as a disclosable risk factor. 

Senior Division of Enforcement officials from the U.S. Securities and Exchange Commission (SEC or Commission) spoke with SEC alumni, private practitioners, and other professionals at the Securities Enforcement Forum West 2025 (the Forum), held on May 15, 2025, in Los Angeles—nearly one month after Chairman Paul Atkins was sworn in. 

SEC Enforcement West Deputy Director Kate Zoladz opened her remarks at the Forum by quoting Mark Twain: “reports of the SEC’s death have been greatly exaggerated,” emphasizing the staff’s return to basics and intent to continue protecting investors. While panelists opined on the changing tides as Chairman Atkins steps in, it remains clear that the focus will be on bringing “bread and butter” enforcement actions.

Key Developments 

Policy Changes and What’s Ahead 

The SEC is undergoing a significant period of transformation, and panelists explored the implications of these changes and how they may shape the future of enforcement. 

Organizational and process changes. Structural changes and amendments to the formal order process, and the impact of these changes, were discussed in detail throughout the Forum: 

• Structural. In April 2025, the SEC reduced the leadership whom staff report to across the SEC’s 10 regional offices. Previously, a regional director at each office was responsible for its own geographic region. Now, there are four deputy directors to oversee three geographic regions (the Northeast, Southwest, and West) and the specialized units respectively. Staff explained that this framework reflects the “reality of national enforcement” and “ensures consistency.”
• Formal orders. In early March of this year, the Commission adopted a final rule amending its regulations and rescinding the 2009 delegation of authority that permitted the Division of Enforcement to issue formal orders of investigation, which are required for staff to issue subpoenas for documents or witness testimony. As a result, the SEC resurrected the previous policy where only the Commissioners have authority to issue formal orders.
• Impact. Interestingly, panelists suspected that these changes may slow the pace of investigations as there are now fewer individuals with more responsibility, despite the SEC’s claim that the above changes would streamline enforcement actions. However, staff noted that there is no evidence thus far to support these suspicions, and it remains to be seen how these changes will affect enforcement actions.

Corporate financial penalties. Staff indicated that there will be a continued and sharpened focus on individual accountability and directed regulated entities to a 2006 SEC statement for guidance relating to corporate penalties.

DOJ corporate guidance. On May 12, 2025, the Criminal Division of the U.S. Department of Justice (DOJ) issued a memorandum focusing on its priorities and policies for prosecuting corporate and white-collar crimes in the new administration. Panelists hinted that the memorandum could potentially reduce parallel proceedings with the DOJ and SEC, but only time will tell.

Cryptocurrency 

Amid recent and ongoing changes in the enforcement and regulatory environment, crypto was a focal point at the Forum. Despite the shift away from “regulation by enforcement,” staff panelists emphasized that enforcement will play a “vital role” in eliminating fraud and manipulation in the market. Staff repeated that although it will take time for the contours of the regulatory framework to take shape, enforcement will continue to “complement” the recently formed Crypto Task Force’s work. One example staff cited is the April 22, 2025, complaint against PGI Global founder Ramil Palafox, which alleges Palafox falsely guaranteed returns to investors from PGI Global’s supposed crypto asset and foreign exchange trading.

Cybersecurity and AI 

Forum panelists highlighted that cybersecurity and artificial intelligence (AI) will remain an enforcement priority, citing a recent study indicating that publicly disclosed ransomware attacks are up 45% in Q1 2025 from Q1 2024. Panelists also discussed the formation of the new Cyber and Emerging Technologies Unit (CETU), containing approximately 30 fraud specialists and attorneys across multiple offices. Priorities of the CETU include: (1) fraud committed using emerging technology, such as AI and machine learning; (2) use of social media, the dark web, or false websites to perpetrate fraud; (3) hacking to obtain material nonpublic information; (4) takeovers of retail brokerage accounts; (5) fraud involving blockchain technology and crypto assets; (6) regulated entities’ compliance with cybersecurity rules and regulations; and (7) public issuer fraudulent disclosure relating to cybersecurity.

While the priorities outlined by the panelists indicate a continued focus on cybersecurity, AI, and other emerging technologies, staff opined that we will see movement away from cases stemming from pure controls violations and instead see a focus on fraud in this area.

Financial Reporting

Financial reporting fraud will also continue to be an enforcement priority. Panelists noted the potential significance of customs fraud in this context—especially considering the DOJ’s recent memorandum announcing trade and customs fraud, including tariff evasion, as one of its priorities.

Companies may be evaluating whether to include a risk factor disclosure regarding tariffs. Panelists encouraged consideration of the following when making that determination: (1) if a risk factor disclosure is made and it materializes, then it must be disclosed; (2) ensure disclosures regarding tariffs are supportable and properly documented; and (3) companies should assess whether supply chain issues related to the tariffs are affecting their business.

Insider Trading

Panelists widely agreed that we can expect to see enforcement of insider trading cases moving forward. Colleen Keating, senior counsel at the SEC, explained that insider trading actions are “bread and butter” matters for the staff. In fact, since the start of fiscal year 2025, the Commission has initiated 31 insider trading actions—19 of these actions were brought prior to President Trump taking office, while 12 have been filed since his inauguration.

Insider trading matters also provide an opportunity for parallel proceedings with the DOJ. While the recent DOJ memorandum regarding white-collar enforcement discusses protecting investors and U.S. markets, panelists were uncertain if that extended to matters such as insider trading. In particular, panelists agreed that the tone of the memorandum indicated less focus on traditional white-collar enforcement like insider trading. Rather, panelists expected this to take the form of enforcement actions related to Ponzi schemes or similar matters where investors are a clear victim. It remains to be seen how this memorandum will be applied in the context of parallel proceedings with the SEC.