News

In little more than one month as Chair of the Securities and Exchange Commission (“SEC” or “Commission”), Paul Atkins has outlined, in various public remarks, specific, concrete intentions for steering the SEC in a new direction – in his words, “a new day at the SEC.”[1]  In a steady cadence of statements,[2] he has signaled several themes about what the Commission plans to accomplish:

1. Focus on the SEC’s “Core Mission.”[3] Chair Atkins has stressed returning to the “familiar three-part mission enunciated by Congress in the Exchange Act:  protecting investors; furthering capital formation; and safeguarding fair, orderly and efficient markets.”[4]  “Investor protection is the cornerstone of our mission”; “[c]apital formation is at the root of what we do”;  and “[w]e should not overlook the part about fair, orderly, and efficient markets.”[5]  He has framed these objectives in part as advancing fairness in regulation:  “Predictability, due process, rule of law, integrity are all part of what create respect and project a sense that one can get a fair shake without vindictiveness or ulterior motives.”[6]  Relatedly, Chair Atkins has pledged “to keep politics out of how our securities laws and regulations are applied.”[7]
2. Breaking with the Gensler Commission. With other Commissioners, Chair Atkins has trumpeted a clear break from the Gensler Commission and pointedly criticized the previous Commission’s approach.  He suggested that the Gensler Commission lost its sense of “fairness, orderliness, and efficiency”[8] and engaged in “ad hoc” enforcement and policymaking.[9] “Unfortunately, in the last four years until January, the SEC’s long-held reputation [for fairness] has suffered.”[10]
3. Unleashing Crypto Innovation. In his May 12 Crypto Task Force speech, Chair Atkins echoed President Trump’s call for the United States to be the “‘crypto capital of the planet.’”[11]  He expressed a commitment to fostering innovation in the crypto space by creating a regulatory environment that supports the lawful issuance and trading of crypto assets through clear guidelines.  He plans to depart from what he calls the prior Commission’s “‘head-in-the- sand’” and “shoot-first-and-ask-questions-later” approaches.[12]

More specifically, Chair Atkins announced plans for three areas of crypto asset policy – issuance, custody and trading.  As to issuance, Chair Atkins “intend[s] for the Commission to establish clear and sensible guidelines for distributions of crypto assets that are securities or subject to an investment contract,” noting, for example, that the “Commission staff recently issued a staff statement on disclosure obligations for certain registrations and offerings.”[13]  As to custody, Chair Atkins “support[s] providing registrants with greater optionality” and noted with approval the SEC Staff’s recission of Staff Accounting Bulletin No. 121, which he characterized as inappropriately broad for a pronouncement that that skirted notice-and-comment rulemaking.[14]  Finally, as to trading, Chair Atkins said that he is “in favor of allowing registrants to trade a broader variety of products on their platforms and in response to market demand”[15] allowing broker-dealers and ATSs to trade securities and non-securities under one roof,[16] and enabling the listing and trading of crypto assets on national securities exchanges.[17]

4. Emphasis on Traditional Enforcement. Chair Atkins has outlined several perspectives on SEC enforcement.  First, he has called for the SEC’s enforcement priorities to return to the SEC’s core mission of investor protection, with a focus on traditional fraud, holding accountable “those who lie, cheat, and steal.”[18]  This suggests cases involving, for example, offering frauds, public company accounting and disclosure, insider trading, and market manipulation.  It also suggests, possibly, fewer enforcement actions for technical violations such as books-and-records infractions.

Second, he envisions an enforcement focus on clear-cut violations, while avoiding cases built on novel or aggressive legal theories.  Thus, the SEC will move away from what he characterized as “ad hoc” enforcement.[19]  “The Commission’s enforcement approach will return to Congress’ original intent, which is to police violations of these established obligations, particularly as they relate to fraud and manipulation.”[20]

Third, Chair Atkins announced plans for reforming the SEC’s administrative proceeding process.  He asked Commissioner Caroline Crenshaw to take on the “SEC’s administrative law proceedings framework and procedures in adjudications” in light of the two Supreme Court rulings (SEC v. Jarksy and Loper Bright Industries) that he believes “oblige” the Commission to “rethink and reform this area.”[21]

5. Organization and Staffing. Chair Atkins has commented on three aspects of the SEC’s structure.  First, he voiced respect for the SEC Staff – praising the “SEC’s longstanding reputation for its dedicated and highly skilled professionals” – and suggested that he does not seek further material reductions in headcount – noting the need, “in many cases,” to fill vacancies resulting from the SEC’s 15% reduction in headcount this fiscal year.[22]  Second, Chair Atkins signaled support for the Agency’s regional offices.  Although the GSA plans to terminate leases for the SEC’s Los Angeles and Philadelphia Offices, Chair Atkins reported that “[d]iscussions with the GSA and the landlords are ongoing,” argued that “[w]e cannot and should not have all of the SEC’s staff in Washington and New York,” and declared his “belie[f] in the SEC’s regional office concept.”[23]  Third, Chair Atkins predicted “targeted, common-sense reorganizations.”[24]  He cited asking Congress to disband the agency’s Strategic Hub for Innovation and Financial Technology as an example.[25]
6. Fostering Capital Formation. Chair Atkins has emphasized a policy of encouraging investment and capital formation:  “I intend for the Commission to focus on providing meaningful pathways for entrepreneurs to obtain the capital that they need to execute their innovative ideas and grow their companies in both the private and public markets.”[26]  Chair Atkins has zeroed-in on whether Regulation A can serve as a more useful vehicle for fundraising, asking “[b]esides increasing the offering limit, what else can be done to incentivize greater use of Regulation A?”[27]  He also has expressed concern over the burdensome nature of certain disclosure requirements, particularly those related to climate risk.
7. Approach Toward Rulemaking. Chair Atkins has called for a more deliberate process toward SEC rulemaking.  “The SEC is returning rulemaking to regular order. Our comment periods will not be artificially short, and the public will have ample time to provide feedback. The SEC will also be sure to take into consideration how rules overlap and how regulatory burdens build, in keeping with our obligation to consider their costs and benefits.”[28] He anticipates rulemaking in response to demonstrated need:  “Before we act, we first must identify a problem to be solved and propose a resolution that is tailored to solve it – rather than create a solution in search of an unidentified problem.”[29]  And he has called for greater transparency concerning the economic impact of regulation:  “Going forward, we must show our work so that the public understands what we are proposing and why.  We must show that we have considered the potential effects of our rules, including the negative ones.”[30]

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            How these themes will play out, of course, remains to be seen.  There are reasons for optimism for what they mean, and caution for what they do not.

What do they mean?  The confluence of these themes points to one overall observation – an anticipation that the SEC will be more open to views from the private sector.  Outside counsel, public companies, regulated entities, cutting-edge entrepreneurs, and trade associations have a unique opportunity to influence regulations, SEC processes, and attitudes toward enforcement.  Private sector views can help the Commission achieve its goal of practical, common-sense regulation.

What do they not mean?  Businesses should not misconstrue the Commission’s new approach as a green light to give short shrift to Compliance functions, disclosure requirements, or vigilance especially toward fraud.  Just because the current Commission intends to promote more user-friendly regulation does not mean it expects entities to disregard the rules that exist.  The Commission and its Staff are seasoned, sophisticated professionals who respect the regulatory system and expect market participants and the public to do so as well.

 

                                                            Barry W. Rashkover

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Walden Macht Haran & Williams’ Securities Enforcement practice represents companies and individuals in investigations and enforcement actions by regulators including the Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), the New York Stock Exchange (“NYSE”), Commodity Futures Trading Commission (“CFTC”) and state attorneys general and commissions.  The practice focuses on high-stakes investigations and enforcement actions, especially those where careers and the survival of businesses are at stake.  It covers the full spectrum of securities enforcement, including matters involving public companies and senior officials; broker-dealers and financial services professionals; hedge funds, private equity funds, and other investment advisers; and crypto.  Its practitioners also conduct securities-related internal company investigations.  WMHW’s Securities Enforcement lawyers are seasoned courtroom advocates with considerable experience litigating SEC enforcement actions in federal court and SEC administrative proceedings.

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[1] May 12, 2025 Crypto Task Force Roundtable Speech.

 

[2] April 22 Remarks at his Swearing-In (https://www.sec.gov/newsroom/speeches-statements/atkins-white-house-042225); April 25 at the Crypto Task Force Roundtable (https://www.sec.gov/newsroom/speeches-statements/atkins-remarks-crypto-task-force-roundtable-042525); May 6 Remarks at the Small Business Capital Formation Advisory Committee (https://www.sec.gov/newsroom/speeches-statements/atkins-sbcfac-050625 and at the SEC Town Hall (https://www.sec.gov/newsroom/speeches-statements/atkins-townhall-05062025); May 12 at the Crypto Task Force Roundtable (https://www.sec.gov/newsroom/speeches-statements/atkins-remarks-crypto-roundtable-tokenization-051225); May 16 at the 12^th Annual Conference on Financial Market Regulation (https://www.sec.gov/newsroom/speeches-statements/atkins-conference-financial-market-regulation-051625); May 19 at SEC Speaks (https://www.sec.gov/newsroom/speeches-statements/atkins-prepared-remarks-sec-speaks-051925); and May 20 in Congressional Testimony (https://www.sec.gov/newsroom/speeches-statements/atkins-testimony-fsgg-052025).

 

[3] May 6, 2025 Town Hall Remarks.

 

[4] Id.

[5] Id. (emphasis in original).

[6] Id.

[7] April 22, 2025 Swearing-In.

[8] May 6, 2025 Town Hall Remarks.

 

[9] May 12, 2025 Crypto Task Force Roundtable Speech (emphasis in original).

 

[10] May 6, 2025 Town Hall Remarks.

 

[11] May 12, 2025 Crypto Task Force Roundtable Speech.

[12] Id.  See also April 25, 2025 Crypto Task Force Roundtable Remarks (looking forward to developing “a rational, fit-for-purpose regulatory framework for crypto assets” and praising Commissioner Hester Peirce as “the right person to lead the effort to come up with a rational regulatory framework for crypto asset markets”).

[13] May 12, 2025 Crypto Task Force Roundtable Speech.

[14] Id.

 

[15] Id.
[16] See May 19, 2025 Remarks at SEC Speaks.

[17] May 12, 2025 Crypto Task Force Roundtable Speech.

 

[18] May 6, 2025 Town Hall Remarks.

[19] May 12, 2025 Crypto Task Force Roundtable Speech (emphasis in original).

 

[20] Id.

[21] May 20, 2025 Congressional Testimony.  On May 19, 2025 at the SEC Speaks conference, Commissioner Mark Uyeda outlined concepts for reforming the SEC’s Administrative adjudicatory process, including greater Commission oversight of administrative law judges (“ALJs”).  He also suggested reserving administrative litigation to actions seeking particular remedies such as “cease-and-desist orders, orders requiring an accounting, and orders to prohibit a person associated with registered entities from serving as an officer or director” as well as “orders denying the registration of a person as a regulated entity, censuring, placing limitations on the activities, functions, or operations of a regulated entity, and temporary and permanent suspensions as well as to suspend or revoke the registration of a security.”  https://www.sec.gov/newsroom/speeches-statements/uyeda-remarks-sec-speaks-051925.

 

[22] May 6, 2025 Town Hall Remarks.

 

[23] May 20, 2025 Congressional Testimony.

[24] Id.

 

[25] Id.

 

[26] May 6, 2025 Remarks at the Small Business Capital Formation Advisory Committee.

 

[27] Id.

[28] May 20, 2025 Congressional Testimony.

 

[29] May 16, 2025 Remarks at Financial Market Regulation Conference.

[30] Id.