By John C. Coffee, Jr. and Robert Pozen
The SEC used to intimidate corporate wrongdoers. Now its own commissioners are gutting its leverage.
Securities regulators are seeing their powers being shackled.
The current SEC commissioners are consciously weakening the agency's leverage in negotiations with large corporate defendants.
The Securities and Exchange Commission (SEC) is generally regarded as one of the smartest, toughest agencies in Washington. But tough enforcement is not a hallmark of the Trump administration, which has substantially cut the SEC's budget and staffing. As a result, the SEC is bringing fewer enforcement actions. In fiscal 2025, the SEC filed 30% fewer stand-alone enforcement actions than in fiscal 2024, and stopped bringing certain kinds of enforcement cases ( for example, under the Foreign Corrupt Practices Act).
