Authors
Partner, Disputes, Toronto
Associate, Disputes, Toronto
Articling Student, Toronto
Key Takeaways
- The SEC’s enforcement activities have shifted dramatically, reflecting changes in leadership and political priorities.
- Under Chair Gensler, the SEC focused on aggressive enforcement and substantial penalties, particularly in cryptocurrency.
- Canadian market participants must stay informed about these shifts, as they may impact compliance and regulatory approaches.
As the largest capital markets regulator, the activities of the U.S. Securities and Exchange Commission (SEC) have great impact on Canadian and international regulators. As we have written previously, there have been dramatic shifts in priorities and approaches taken by the SEC under the Trump Administration (see, for example, our April 23, 2026 blog: “White-collar enforcement under Trump 2.0: insights from the 2026 ABA White-Collar Crime Institute” and our February 26, 2025 blog: “Recent developments in the U.S. SEC’s proceedings against major crypto players signals pro-industry policy shift”). These changes have undoubtedly had impacts on Canadian regulatory approaches (see, for example, our April 24, 2025 blog: “Cooling off on climate- and diversity-related disclosure: CSA provides update to market”).
Enforcement activity over the past two fiscal years reflect this new approach. From record-breaking enforcement action under the Biden administration to a sharp decline in new enforcement actions under the Trump administration, the SEC’s approach to securities regulation is undergoing a dramatic transformation. For Canadian securities lawyers and compliance professionals, this shift in the SEC’s enforcement practice offers valuable comparative insights, as both jurisdictions grapple with similar regulatory challenges, from cryptocurrency oversight to emerging technologies.
The Gensler era: aggressive enforcement and record penalties
The following table depicts the trajectory of SEC enforcement over recent fiscal years:[1]
| Fiscal year | Total actions | % change compared to prior fiscal year | Standalone actions[2] | % change compared to prior fiscal year | Monetary relief ordered in SEC actions |
|---|---|---|---|---|---|
| 2021 | 697 | 3% decrease | 434 | 7% increase | Approx. $3.8 billion |
| 2022 | 760 | 9% increase | 462 | 6.5% increase | Approx. $6.4 billion |
| 2023 | 784 | 3% increase | 501 | 8% increase | Approx. $4.9 billion |
| 2024 | 583 | 26% decrease | 431 | 14% decrease | Approx. $8.2 billion |
| 2025 | 456 | 22% decrease | 303 | 30% decrease | Approx. $2.7 billion[3] |
Under the leadership of Chair Gary Gensler (April 17, 2021— January 20, 2025), the SEC adopted a broader regulatory approach constituting higher volumes of enforcement actions and record financial penalties.
That enforcement era was also notable for proactive industry-wide initiatives. Since fiscal year 2022, the SEC brought substantial “off-channel communications” cases against broker-dealers and investment advisers for failures by the firms and their personnel to maintain and preserve off-channel communication. These cases resulted in aggregate penalties against firms for violating recordkeeping provisions of the federal securities laws, exceeding US$2 billion. During that era, the agency also pursued aggressive action in the cryptocurrency space, filing high-profile cases against major platforms including Binance and Coinbase.
The pendulum swings: a new enforcement philosophy
Of the 56 actions against public companies and subsidiaries initiated in fiscal year 2025, former Chair Gensler oversaw 52 prior to resigning on January 20, 2025 — the highest number of actions brought by an outgoing chair since at least fiscal year 2013. By contrast, there were only three enforcement actions against public companies and subsidiaries initiated in the second half of fiscal year 2025 — the lowest in the Securities Enforcement Empirical Database’s [PDF] history. Total monetary settlements of US$808 million against public companies and subsidiaries in fiscal year 2025 were the lowest since fiscal year 2012.
The current SEC leadership has been explicit about its criticism of the prior administration’s approach and reasons for the reduced enforcement activity. The SEC’s official announcement stated that “resources have been misapplied in prior years to pursue media headlines and run up numbers,” and described fiscal year 2025 as having been marked by “an unprecedented rush to bring a significant number of cases in advance of the presidential inauguration.” SEC Chairman Paul Atkins has stated that the agency has ended so-called “regulation by enforcement,” adding, “we have redirected resources toward the types of misconduct that inflict the greatest harm — particularly fraud, market manipulation and abuses of trust — and away from approaches that prioritized volume and record-setting penalties over true investor protection.”
This sentiment has been echoed by enforcement leadership. Margaret Ryan, the former Director of Enforcement, stated in her first public remarks that she is “far more concerned with the quality and impact of the enforcement actions that we bring than with chasing numbers.”
The cryptocurrency pivot
Perhaps no area better illustrates the SEC’s shift than its approach to cryptocurrency regulation. Under the Trump administration, the agency has voluntarily dismissed numerous cryptocurrency-related enforcement actions brought under the prior administration, including cases against Coinbase, Binance, Cumberland DRW, Consensys Software Inc., and others.
In early 2025, the SEC announced it would dismiss its lawsuit against Coinbase, stating that the decision “rests on its judgment that the dismissal will facilitate the Commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry.” Acting Chair Mark Uyeda noted that the SEC’s views on crypto activity over the last several years “have been largely expressed through enforcement actions without engaging the general public” and pledged that “it’s time for the Commission to rectify its approach and develop crypto policy in a more transparent manner.”
Similarly, in May 2025, the SEC voluntarily dismissed its lawsuit against Binance. The SEC had initiated proceedings against Binance under the Biden administration in 2023, alleging [PDF] various securities law violations.
Commissioner Hester Peirce, who leads the agency’s Crypto Task Force, stated that the prior administration had taken “a sweeping and difficult-to-decipher approach in its application of [SEC v. W.J. Howey Co.,328 U.S. 293 (1946)] to the crypto industry. The industry suffered because effort that would have gone into building interesting and innovative products and services instead went into strategizing with costly lawyers to determine how best to avoid regulatory liability.” She also stated that “the decision by the previous Commission to shift [the function of developing regulations to address new industries and business practices] to the Division of Enforcement by engaging in a large-scale regulation-by-enforcement initiative harmed the American public.”
Enduring priorities: fraud and investor protection
Despite the overall reduction in enforcement volume, the SEC has emphasized that certain priorities have remained constant — or even intensified. Enforcement Director Margaret Ryan emphasized in February 2026 that “fraud in our capital markets persists, and so does my staff as they work to eliminate it.” She described the focus as “a return to basics,” pursuing “the liars, cheats, and thieves” who harm investors.
The SEC continued to bring significant fraud cases, including actions against alleged Ponzi schemes such as
- Paramount Management Group and Prestige Investment Group, in connection with a scheme that allegedly defrauded approximately 2,700 investors and resulted in US$400 million in investor losses
- First Liberty Building & Loan, in connection with an alleged scheme that defrauded approximately 300 investors of more than US$140 million
The agency also emphasized individual accountability. Approximately two-thirds of standalone actions in fiscal year 2025 involved charges against individual bad actors — a 27% year-over-year increase — and nearly nine out of every 10 standalone actions filed under the new leadership involved individual charges.
Implications for Canadian market participants
The dramatic shift in SEC enforcement volume and priorities following the change in presidential administration demonstrates that regulatory priorities, including those relating to enforcement, can change and are impacted by the priorities of the government of the day. Canadian practitioners advising clients with exposure to U.S. securities law need to monitor these shifts and adapt their compliance guidance to align with the changing regulatory landscape.
Despite other shifts in enforcement focus, protection of investors from fraud — particularly retail investors targeted by Ponzi schemes and other scams — remains paramount. Notably, nearly two-thirds of standalone enforcement actions in fiscal year 2025 involved charges against individual wrongdoers, reflecting the SEC’s renewed emphasis on personal accountability.
It will be interesting to see how Canadian regulatory enforcement priorities have been affected by these trends when the Canadian Securities Administrators releases its “Year in Review” report in the coming months.
[1] The SEC operates on the federal fiscal year, which begins on October 1 and ends on September 30 of the following year.
[2] Standalone actions are original enforcement cases initiated by the SEC, as distinct from “follow-on” actions, which are administrative proceedings that seek to bar or suspend individuals based on separate orders such as criminal convictions or civil injunctions.
[3] This figure excludes the Stanford Ponzi scheme judgment of approximately $14.9 billion, which was a finalization of a 2013 order.
