A New Direction for the SEC

At this year’s annual SEC Speaks conference, the new SEC Chair Paul Atkins and his fellow Republican Commissioners made clear that the SEC is headed in a very different direction than the prior Commission under Chair Gary Gensler. Among other things, Atkins said the SEC would be focused on innovation and expanding investment opportunities for retail investors.

At the conference, the SEC and its staff discussed many of the significant changes the new SEC has already made in its first few months, including with respect to:

• Crypto – There has been a complete rollback of the crypto positions of the prior SEC, with new steps since January including:

• The creation of a Crypto Task Force to consider how the securities laws should apply to crypto, chaired by Commissioner Hester Peirce, whose view is that most currently existing crypto assets in the market are not securities;
• The issuance of new guidance (such as on crypto mining and broker-dealer custody of customer crypto assets) and the rescission of crypto-unfriendly guidance such as Staff Accounting Bulletin (SAB) No. 121;
• The dismissal of a number of enforcement actions where the main alleged violation was the failure to register the offer and sale of a token; and
• The disbandment of the SEC’s Strategic Hub for Innovation and Financial Technology, which according to Chair Atkins was seen by many in the crypto industry as an enforcement tool.

• Enforcement – The Acting Director of Enforcement acknowledged that there have been significant changes (including a loss of about 15% of staff SEC-wide) but said the changes will not be as stark as some have predicted. There will be different priorities but Enforcement will continue to focus on the core areas: insider trading; accounting and financial disclosure fraud; offering fraud; and market manipulation. The changes include:

• There will probably be a greater emphasis on individual (rather than corporate) liability;
• There will also be less focus on violations that do  not involve fraud, especially where the conduct has been fully remediated;
• The Division has been reorganized: Enforcement staff now report up through one of four deputy directors. Three deputy directors are focused on geographic areas, and one is focused on specialized units (such as asset management, cyber and emerging technologies, complex financial instruments, and market abuse). For the specialized units, the focus will be harm to retail investors; and
• “Wells meetings” will be granted with Enforcement leadership (the director or one of the four deputy directors) if parties request them, but defense counsel should not expect multiple meetings (i.e., at every juncture of the investigation) with leadership. The staff intends to be more open and transparent during these meetings.

For further details about other developments during the SEC’s first quarter, please see our 2025 Q1 Round-Up.

The Commissioners and the staff also discussed some potential areas of change:

• Executive compensation disclosure – The SEC has scheduled a public roundtable for June 26, 2025 to discuss executive compensation disclosure requirements. The potential topics for consideration include: how decisions are made within the company with respect to executive compensation; how investors are using executive compensation information and whether despite the complexity and the length of that information, those investors can actually identify the material information they need and whether the rules could be revised to return to a simpler presentation and focus for those investors; how executive compensation disclosure has changed over the last 20 plus years; and hot topics such as disclosure about pay versus performance, callbacks, and perks.
• Broadening retail investment in private companies – The SEC staff has received many suggestions about possible ways to expand who qualifies as an accredited investor and how to give investors more access to private companies. Among other things, the SEC is considering whether to revisit the SEC staff’s position that registered closed-ended funds investing 15% of their funds in private funds (such as hedge funds and private equity funds) must impose a minimum initial investment of $25,000 and restrict sales to accredited investors.
• Registrant filer categories – The SEC is concerned that the current registrant filer categories – such as “large accelerated filer” and “smaller reporting company” – are overly complex and do not provide sufficient scale disclosure benefits. Market participants have also complained about how complicated the various overlapping filer categories have become.
• Extending EGC accommodations – The SEC wants to make public markets more attractive, and one way that is being considered is expanding the emerging growth company regime, including by providing more accommodations and allowing companies to remain EGCs for a longer period of time.
• Federal pre-emption – Another area of focus is whether the current way federal law pre-empts state securities laws makes sense. For example, if a company files a Form S-1 to register a primary offering under the Securities Act of 1933 but does not list the securities on a national securities exchange, the offering is subject to U.S. state registration requirements for both the primary and secondary offerings of those securities. However, if a shareholder relies on Section 4(a)(1), including the Rule 144 safe harbor, to resell their shares, then the state registration requirements do not apply. Commissioner Uyeda has questioned where a company has filed a registration statement subject to SEC staff review, whether that transaction needs to be subject to additional review by the states, especially when such review may not yield additional protections for investors.
• Rule 15c2-11 – The staff is aware that there is an interest in additional relief related to Rule 15c2-11, which governs the publication or quotation of securities in a medium other than a national securities exchange, and they are “currently considering next steps.” See our client briefing for a summary of the prior relief the staff has provided.