A New Direction at the SEC: Examination Priorities, Enforcement Results, and Enforcement Manual Updates

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Recent developments at the United States Securities and Exchange Commission (“SEC”) reveal an agency in the midst of a significant directional shift. Following the agency’s April 2025 transition to Chairman Paul Atkins, the SEC has made significant focus changes in both its examinations and enforcement programs. Below, we discuss some highlights from the SEC’s 2026 Examination Priorities, showing what the SEC will focus on during its examinations of its regulated entities. On the enforcement front, we discuss how the Fiscal Year 2025 Enforcement Results and updated Enforcement Manual come into play in a shift away from that division’s prior “regulation by enforcement” approach, towards an anti-fraud centered mission with process enhancements.

1. 2026 Examination Priorities

While maintaining its risk-based and transparent investor protection approach from 2025, the SEC’s 2026 Examination Priorities portray a new stance on its examination program which focuses on how “changes in the U.S. capital markets and at the SEC present new opportunities for growth, innovation and refinement of our approach to delivering on the Commission’s mission to protect investors, maintain fair and orderly capital markets, and facilitate capital formation.” Notably, terms such as “innovation” and the facilitation of capital formation concept were missing from the 2025 Priorities, and the 2026 Priorities also note that the examinations program is now “operating with fewer resources.” Taken together, this could possibly signal that the SEC’s examinations program may be taking a more business friendly approach for 2026 while at the same time reinforcing its foundational mission of investor protection. Some interesting highlights from the 2026 Priorities are as follows:

• Investment Companies – Examinations will continue to prioritize the review of registered investment companies (“RICs”) or funds, including mutual funds and exchange-traded funds, due to their importance to retail investors (especially retirement savers), with a general focus on compliance programs, disclosures, and governance practices. Some particular focus areas include fund fees and expenses, consistency of portfolio management practices and disclosures, market volatility issues, funds with exposure to commercial real estate, and compliance with the “names rule” under the Investment Company Act (Rule 35d-1).
• Investment Advisers – Examinations will focus on investment adviser adherence to fiduciary conduct standards and firm compliance programs.
• Broker-Dealers – Painting in broad strokes, broker-dealer examinations will focus on a number of areas such as Regulation Best Interest (“Regulation BI”) compliance (including recommendations, conflict identification for rollovers and limited product menu recommendations, and processes for reasonably available alternatives and the Care Obligation); the financial responsibility rules (net capital, customer protection, liquidity management); and trading practices (such as extended hours trading, best execution, and Regulation SHO). Note that for Regulation BI, examinations will focus on complex, tax-advantaged, and illiquid products, certain ETFs, municipal securities, private placements, similar product recommendations, recommendations to older or college saver investors, dual registrant conflicts, Form CRS, and products that are growing in the retail investment space.

The 2026 Priorities also focus on specific risk areas that could impact different market participants across the board, some of which are highlighted below:

• Information Security and Operational Resiliency – In what it calls a “perennial examination priority” to help ensure the safeguarding of customer records and information, the SEC will continue to focus on firm cybersecurity practices. In this area, the SEC will focus on firm policies and procedures covering governance, access controls, account management, incident response, safeguards against ransomware and malware, AI-enabled threats, and data loss prevention. Operational resiliency will also be a focus. The SEC will also evaluate compliance and controls related to Regulation S-ID’s written identity theft program requirement and Regulation S-P’s third-party vendor oversight and incident response program requirements.
• Emerging Financial Technologies – The SEC will focus on firms that use automated investment tools, AI, trading algorithms or platforms, and alternative data. Accordingly, firms that engage in automated investment advisory services can expect the review of particular aspects of that business, including whether firms fairly and accurately make representations, whether firms operate with controls consistent with their disclosures and in accord with regulatory requirements, and whether the technology firms use leads to suitable investment advice or recommendations. These examinations will also focus on AI governance and supervisory controls, the accuracy of AI-related claims, and firms’ use of regulatory technology to automate internal processes.
• Anti-Money Laundering – The SEC will continue to assess whether broker-dealers and certain RICs are appropriately tailoring their AML programs to their business models. Specifically, examinations will review coverage for foreign financial institution omnibus account risks, independent testing, customer identification and beneficial ownership procedures, and meeting Suspicious Activity Report filing obligations. The SEC will also review RICs’ oversight of financial intermediaries and compliance with OFAC sanction requirements.

We also note that while the topic of crypto assets appeared in the 2025 Priorities risk areas section, it was absent from that section in 2026. For more details and the SEC’s full 2026 Examination Priorities, please click here.

2. Fiscal Year 2025 Enforcement Results

The SEC’s Enforcement Results for Fiscal Year (“FY”) 2025 show that this division filed a total of 456 enforcement actions, closed 1,095 matters after investigation, and obtained monetary relief totaling $17.9 billion. The SEC stated that “FY 2025 was a unique period of transition for the enforcement division never experienced before in modern SEC history . . . characterized by an unprecedented rush to bring a significant number of cases in advance of the presidential inauguration and the aggressive pursuit of novel legal theories under the prior Commission.” The comparative statistics support this statement, as almost half of the enforcement actions for FY 2025 were brought in its first quarter alone (while under the leadership of previous SEC Chair Gary Gensler).

Beyond providing statistics, the SEC gave valuable insight as to its enforcement priorities:

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.

Furthermore, SEC Chair Paul Atkins stated that “the Commission has put a stop to regulation by enforcement and recentered its enforcement program on the Commission’s core mission by prioritizing cases that provide meaningful investor protection and strengthen market integrity” and moved away from prior administration “approaches that prioritized volume and record-setting penalties over true investor protection.” The FY 2025 enforcement results showed the division’s fraud-based focus by highlighting cases brought in the following areas:

• Protecting Retail Investors;
• Holding Individual Wrongdoers Accountable;
• Addressing Securities Fraud by Foreign Actors;
• Safeguarding Markets from Insider Trading, Manipulation, and Other Abusive Practices; and
• Emerging Technology Investor Protection.

Interestingly, the results noted the Commission’s “necessary course correction in its approach to enforcing the federal securities laws in the context of crypto assets,” with the Division of Enforcement remaining focused on “detecting, deterring, and bringing actions against those seeking to take advantage of investors by misusing new technologies.” More details can be found in the SEC’s Fiscal Year 2025 Enforcement Results.

3. SEC Enforcement Manual Updates

On February 24, 2026, the SEC announced significant updates to its Enforcement Manual, which was last revised in 2017. In its press release, the Commission stated that the Manual builds on the Division of Enforcement’s commitment to transparency, fairness, and process while ensuring it remains able to fulfill its mission.

Some notable updates and changes to the Manual include:

• Wells Process – The updated Manual better describes the Wells process (in which Enforcement informs potential respondents of its preliminary determination to take enforcement action and provides those potential respondents with an opportunity to make a submission in reply). The Manual now provides pointers for “helpful” Wells responses, gives a four-week response time, and provides an opportunity to have a post-Wells meeting scheduled with Enforcement staff (including a senior leader from the Division).
• Formal Orders of Investigation – Reflecting the SEC’s March 2025 final rule revoking the Enforcement Director's delegated authority to issue formal orders, the Manual now requires Enforcement staff seeking such orders to prepare a descriptive memo, obtain approval from the Office of the Director, and submit the memo and proposed Formal Order to the full Commission for approval.
• Criminal Referrals – The Manual formalizes the process of referring matters to federal and state criminal law enforcement authorities. Enforcement staff should evaluate several factors when considering referrals, including the risk of harm, potential gain to the defendant, the defendant’s specialized knowledge or licensing, the defendant's state of mind and recidivism, and the likelihood that criminal authority involvement will provide additional investor protection.
• Document Preservation – The Manual recommends that Enforcement staff consider the issuance of document preservation letters, which inform the recipient of the existence of an investigation at its outset, and which explicitly require preservation of all documents and communications (including those across all messaging platforms and personal devices).
• Simultaneous Consideration of Enforcement Settlement Recommendations and Waiver Requests – Restoring prior practice from the first Trump Administration, the Manual allows the Commission to review a party's proposed settlement alongside any request to waive automatic disqualifications and other collateral consequences from the enforcement action, thereby providing respondents with better visibility into the collateral effects of contemplated enforcement settlements.
• Statute of Limitations and Tolling – The Manual updates applicable statute of limitations periods pursuant to the National Defense Authorization Act. The Manual notes that the Act’s five-year limitations period for disgorgement has been extended to ten years for securities laws violations where scienter must be established, and also notes the Act’s ten-year period for equitable remedies such as injunctions, bars, suspensions and cease and desist orders. The Manual also requires tiered approval for tolling agreements: Associate Director/Unit Chief approval for tolling up to 90 days, and Director or Deputy Director approval for extensions beyond that period.
• Witness Interviews and Testimony – The Manual explains that if a witness’s counsel is also a potential witness in the investigation, Enforcement staff may refuse to allow that counsel to attend and require that the witness have different counsel, based on Commission Investigation Rule 7(b)’s mandate that “witnesses shall be sequestered.” Such determinations should ordinarily be made by Enforcement staff in consultation with appropriate Enforcement legal personnel.
• Cooperation Credit – The Manual expands on the self-reporting, remediation, and cooperation factors for company cooperation credit. Specifically, the Manual states that self-reporting credit is appropriate where a company reports misconduct before Enforcement staff learns of the misconduct through other sources and before imminent threat of disclosure. It further states that credit will “rarely” be granted for conduct that has already received media attention or is subject to other regulatory investigations. The Manual also now provides examples of effective remediation (such as strengthening internal controls, improving training, and responsible executive compensation claw backs) and exemplary cooperation (such as summarizing factual internal investigation findings, identifying key documents and witnesses, timeliness of early cooperation, and “any other measures that meaningfully advance the Commission’s investigation”).
• Cooperation Committee – For the first time, the Manual recognizes the Division’s Cooperation Committee, whose role is to ensure that cooperation decisions are made in an “appropriate and consistent manner” and who recommends cooperation improvements as needed. The Manual states that Enforcement staff should seek the Committee’s approval for all cooperation agreements, deferred prosecution agreements, non-prosecution agreements, and immunity requests.

For more details on the above and other updates, please see the full Enforcement Manual.

Jonathan M. Prytherch is a shareholder in Maynard Nexsen’s Financial Services group. His practice focuses on regulatory defense, counseling, and investigations for securities broker-dealers and their registered representatives.

Kathryn C. Nelson is an associate in Maynard Nexsen's Financial Services – Employment group. Her practice focuses on the defense of broker-dealers and other financial services professionals in a wide variety of employment matters in state and federal courts, as well as before various administrative agencies and arbitration forums.