SEC enforcement activity is shifting in ways that wealth advisors and RIAs will want to follow closely. A new analysis highlights a steep decline in cases filed so far this year, signaling that the commission is prioritizing direct fraud cases over the broader range of compliance and regulatory violations it pursued under prior leadership.
For advisors, this shift has implications for compliance expectations, industry practices, and client protection standards.
The study, conducted by King & Spalding, reviewed enforcement actions brought by the Securities and Exchange Commission between February 1 and July 31, 2025. It found only 67 new cases during that six-month window, compared with 127 during the same period in 2024 and 198 in 2021, the first year of the Biden administration. That represents a nearly 50% decline year-over-year and a two-thirds reduction from four years ago.
Several forces appear to be driving this drop. First, the SEC’s posture has changed under Chair Paul Atkins, who assumed leadership earlier this year. Appointed by President Donald Trump, Atkins was widely expected to steer the agency toward narrower enforcement priorities, emphasizing frauds that directly harm retail investors. That assumption now appears well-founded.
During the Biden years, Gary Gensler’s SEC pursued an aggressive agenda, particularly targeting the digital asset space. Gensler maintained that most crypto tokens should be treated as securities, a stance that led to a series of high-profile enforcement cases and heated clashes with industry participants. Atkins, by contrast, co-chaired a crypto lobbying group before his appointment and has moved quickly to reverse course, signaling that the SEC will take a more accommodative posture toward the sector. For RIAs advising clients with exposure to digital assets, this pivot is worth watching: regulatory clarity—or the lack of it—can meaningfully affect valuations, fund strategies, and client conversations about risk.
Beyond crypto, the data suggests a narrowing of enforcement categories more broadly. Of the 67 new actions, 32 involved securities offerings, while 16 targeted investment advisors or investment companies. These were often clear cases of fraud, such as misappropriation of client funds. By contrast, only two broker-dealer cases were brought over the six months. That compares with 18 during the same period last year and 16 in 2021. The decline here is striking, especially since broker-dealer enforcement was a significant focus under the prior SEC.
One reason for that sharp decline: the new SEC has largely abandoned enforcement of “off-channel communications.” This was a hallmark issue under Gensler, with the agency penalizing firms for failing to capture business communications made over unapproved platforms like WhatsApp or text. Those cases generated large penalties and sparked industrywide changes in record-keeping and supervisory practices. Under Atkins, that focus has evaporated, relieving compliance pressure but raising questions about whether the issue will resurface under future leadership.
The numbers also reflect broader political and structural shifts. The federal government has implemented a 15% workforce reduction this year, part of a sweeping effort to shrink agencies across the board. The SEC is no exception, and a leaner staff inevitably reduces enforcement capacity. In addition, the timing of case filings complicates the picture. From October 1, 2024, through January 19, 2025, in the final months of the Biden administration, the SEC filed 173 enforcement actions. King & Spalding notes that this “pull-forward” of cases likely accelerated activity before the transition, leaving a lighter pipeline for the new administration. Some cases that might have landed in early 2025 were instead closed earlier, while others may not have been pursued at all.
Still, for wealth managers, the key takeaway is the refocusing of enforcement on investor harm. The SEC’s priority cases now involve misrepresentation, fraud in securities offerings, and misuse of client funds. These are traditional areas of investor protection—critical but narrower than the broad range of compliance actions previously pursued.
That narrower scope raises several questions for advisors. Will firms feel less regulatory pressure around technical compliance issues, such as communications oversight or reporting rules? If so, does that create competitive imbalances between firms that maintain higher compliance standards versus those that cut corners? Conversely, does the renewed focus on outright fraud bolster investor confidence, or does it risk leaving gaps in oversight that could eventually harm clients?
Another unknown is the direction enforcement will take under new leadership in the agency’s enforcement division. The SEC recently appointed a permanent enforcement director, a nonpolitical position with significant influence over the staff’s priorities. Depending on how that leadership team interprets Atkins’ broader philosophy, enforcement activity could ramp back up, though perhaps in different categories than under Gensler. For advisors, the uncertainty makes it important to stay alert to signals from both the commission and the enforcement division in the months ahead.
The decline in broker-dealer enforcement is especially notable for wealth managers who rely on broker-dealer platforms or dual-registered models. Under prior SEC leadership, firms faced intense scrutiny over communication practices, conflicts of interest, and disclosure obligations. Today, those areas appear to be far less of a priority. While this may ease compliance costs, advisors should consider how clients might perceive a looser regulatory environment. Investor trust often depends not just on firm practices but also on confidence that regulators are maintaining a high standard of oversight.
For RIAs, the uptick in enforcement around advisors and investment companies—16 cases in just six months—remains relevant. These cases often involve egregious fraud, such as advisors diverting client assets for personal use or misleading investors in pooled vehicles. While the number is modest, the emphasis is clear: where the SEC sees direct investor harm, it will still act decisively. Advisors should continue emphasizing transparency, documentation, and custody safeguards to reinforce the integrity of their practices.
Stepping back, the broader policy shift reflects the Trump administration’s philosophical approach: less emphasis on regulatory “creativity” and more on pursuing straightforward fraud. This may reduce friction with industry participants, particularly in areas like crypto or complex compliance mandates. But it also raises longer-term questions about market stability and investor protection. History shows that lighter enforcement periods can lead to gaps that opportunistic actors exploit, with consequences that only become clear later.
For wealth managers, the prudent course is to avoid assuming that regulatory scrutiny has disappeared. Even if the SEC is filing fewer cases, other watchdogs—including FINRA, state regulators, and private litigants—may step in where they perceive gaps. Moreover, regulatory cycles tend to shift with political tides; what is deprioritized today may resurface with urgency under a future administration. Advisors who build robust compliance systems and emphasize best practices will be better positioned regardless of regulatory ebb and flow.
Looking ahead, the key question is whether the current six-month trend is a temporary lull or a preview of the next several years. King & Spalding’s report frames it as an open question: will the SEC maintain this narrower focus, or will enforcement activity diversify again as new priorities emerge? For now, advisors should assume the commission’s resources will be aimed squarely at investor fraud and securities offerings, while areas like broker-dealer oversight and digital communications remain on the back burner.
In practice, that means the SEC is less likely to pursue technical violations that don’t clearly harm investors. But for RIAs, this doesn’t lessen the importance of strong internal controls, transparent client communication, and rigorous oversight of business practices. If anything, it reinforces the need to stay ahead of the curve: advisors who hold themselves to higher standards will continue to differentiate themselves in an environment where enforcement may ebb and flow with political leadership.
In short, the SEC’s enforcement slowdown reflects a fundamental recalibration. The numbers confirm a narrower focus, fewer cases overall, and a pivot away from complex or technical violations. For wealth advisors and RIAs, the signal is clear: fraud remains in the crosshairs, but other areas of compliance may receive less attention. How long that balance lasts—and what it means for clients—remains to be seen. The best course is to maintain rigorous standards, anticipate shifts in regulatory focus, and communicate clearly with clients about how firms safeguard their assets in an evolving oversight landscape.
