The SEC’s enforcement drop means less accountability for financial fraud—and less money returned to harmed investors

Investors harmed by financial misconduct are now less likely to see enforcement or restitution. The Securities and Exchange Commission brought 30 percent fewer new enforcement actions in the first year of the Trump administration, continuing a trend of declining scrutiny of Wall Street conduct. The agency is pursuing fewer cases against financial market actors for crimes like insider trading and fraud—even as it claims the shift reflects a focus on investor harm and efficient use of resources. Financial fines have dropped to their lowest level in more than a decade. Disgorgement, the process of forcing companies to return ill-gotten profits, has fallen by 98 percent. Staffing in the SEC’s enforcement division has declined by 17 percent, with many cuts concentrated in enforcement roles. The SEC’s enforcement chief resigned after just six months, citing clashes with Republican political appointees over pursuing fraud cases, including those touching the president’s circle. The agency replaced her with David Woodcock, a former head of the SEC’s Fort Worth office who later worked at Gibson Dunn defending companies against SEC enforcement actions. Investors harmed by financial misconduct are now less likely to see enforcement or restitution.