Securities and Exchange Commission enforcement actions against public companies and subsidiaries hit a 16-year low for actions filed in a fiscal year’s first half, according to an analysis by Cornerstone Research.
In total, the SEC logged five enforcement actions against public companies in the first half of FY 2026, a slight uptick from three actions in the second half of FY 2025. But in the first halves of 2021 through 2025, the agency brought 15, 23, 22 and 53 actions, respectively (and the overwhelming majority of 2025’s 53 actions came before the administration turnover between President Joe Biden and President Donald Trump).
Cornerstone Research Securities Litigation co-head and report co-author Sara Gilley noted that “nuance is important” when comparing data about SEC enforcement actions, acknowledging that the SEC tends to initiate more enforcement actions in the second half of fiscal years.
According to the analysis, three of the first-half actions involved public company defendants, while the other two involved only subsidiaries. Three of the public company actions concerned issuer reporting and disclosure allegations, which have typically accounted for about 38% of the annual filings. The other two actions involved an investment advisor and an exchange.
Additionally, since the start of Trump’s second term in January 2025, Cornerstone noted that there had been three dismissals of enforcement actions against public companies or subsidiaries (two last year, and one in the first half of this year); according to Cornerstone, they marked the first dismissals of actions against a public company in at least 16 years.
The dip in actions between administrations was mirrored in the agency’s annual report on enforcement activities, which shows a 26% decline in enforcement activity between fiscal years 2024 and 2025. In statements accompanying the report, the agency launched attacks on the enforcement approach during former SEC Chair Gary Gensler’s tenure, claiming resources had been “misapplied in prior years to pursue media headlines and run up numbers.”
The SEC declined to comment, aside from pointing to new Enforcement Division Director David Woodcock’s comments at last week’s MFA Legal & Compliance Conference, including his support for the agency’s moves to prioritize “quality over quantity” in cases.
During a recent discussion at FINRA’s annual conference in Washington, D.C., last week, current SEC Chair Paul Atkins reiterated his claim that the agency is moving towards a “back-to-basics” approach, claiming to be focused on “fraud and actual investor harm,” as opposed to “ticky-tack” violations.
“I think that we’re focusing now on quality of cases versus quantity,” Atkins said. “We’re not going to use these sorts of things to throw up numbers because, after all, that just doesn’t really matter.”
However, consumer protection advocates, including Dennis Kelleher, president and CEO of Better Markets, view the SEC enforcement action drops differently, calling it a “pathetic and indefensible dereliction of duty.”
In a statement made after the agency released its enforcement report last month, Kelleher argued that the agency had dropped cases meriting “aggressive enforcement,” and opted to be “a political arm and ideological fellow traveler of the White House that favors the administration’s friends, supporters and contributors.”
“Up is not down; white is not black; and the SEC failure is not success—it is actually failure,” Kelleher claimed.
