SEC reportedly cutting regional director roles as DOGE efforts continue

The Securities and Exchange Commission plans to eliminate regional director positions across the country as part of a broader cost-cutting effort under the Trump administration, according to sources familiar with the matter.

The decision comes as the agency prepares to submit restructuring recommendations to the White House, which has directed federal agencies to reduce staffing and expenditures through the newly created Department of Government Efficiency.

On Friday, SEC leadership informed directors at its 10 regional offices that their roles would be eliminated, two people with knowledge of the discussions told Reuters. The proposal, which still requires approval by the SEC's current three-member commission, is the latest in a series of shifts at the agency since Republicans took control. 

The agency, which oversees the US capital markets representing more than $100 trillion, relies on regional offices to oversee examinations and enforcement actions involving public companies, brokers, and investment firms. Those hubs, located in cities including New York, San Francisco, and Miami, have traditionally played a key role in shaping the SEC’s investigative priorities.

“The regional leadership is what the home office has always looked to for making decisions about enforcement cases and exams,” Andrew M. Calamari, a partner at Finn Dixon & Herling and former director of the SEC’s New York office, told Reuters.

The planned reductions come as part of a broader effort to scale back the federal workforce, a priority for President Donald Trump and special adviser Elon Musk. The administration through DOGE has wasted no time dismissing thousands of government workers and has directed agency leaders to propose further cuts.

Last week, Musk called on federal employees to submit lists of their accomplishments or risk termination, a move that's been challenged by multiple coalitions and labor advocates. As he doubled down on the ultimatum amid a whirlpool of confusion across agencies, more than 20 staffers of the unit walked out in protest Tuesday, declaring that they would "not use [their] skills as technologists to compromise core government systems, jeopardize Americans' sensitive data, or dismantle critical public services."

While the SEC already closed its Salt Lake City regional office in June, one source told Reuters that there are no immediate plans to shut down other locations.

The leaked discussions of change at the agency come amid a drastic shift in its enforcement strategy. The agency recently scaled back its cryptocurrency enforcement unit, reassigning members to other divisions and launching the leaner Cyber and Emerging Technologies unit. The crypto task force led by Hester Peirce, established on January 20, is also now reviewing and working to revamp the SEC’s approach to digital assets.

On Friday, Coinbase announced that the SEC had agreed to settle its long-running case against the company over supposed failures in compliance. In a filing, Coinbase stated that the case was dismissed “with prejudice,” preventing the agency from bringing similar charges in the future.

In another report citing internal sources, Bloomberg detailed how in January, shortly before the SEC voted to file a lawsuit against Musk related to his 2022 acquisition of Twitter, Acting Commissioner Mark Uyeda, who did not hold the position at the time, asked enforcement staff to declare the case was not politically motivated.

Enforcement officials  and lawyers at the agency reportedly declined the request, which one expert assesses as an unusual step that raised concerns within the agency.

“This is getting close to questioning the integrity of the staff,” Adam Pritchard, a securities law professor at Michigan Law School and a former SEC attorney, told Bloomberg. “Just asking the question is very confrontational.”

While many have raised concerns about the consequences of layoffs at federal agencies, Trump administration officials downplayed those concerns, insisting that the aim is not to dismantle agencies but to streamline operations and scale back government spending.

“It’s important to get back to a place where Americans believe that government agencies are worthwhile, do a good job and are benefiting them,” Treasury Secretary Scott Bessent said at an event in Washington on Tuesday, according to separate reporting by Bloomberg.

Bessent, the hedge fund manager named by Donald Trump to lead the Treasury, said the administration aims to shrink the federal government’s role in the economy as "government jobs do not generate real long-term wage growth.

“Our goal is to re-privatize the economy,” Bessent said, outlining plans for financial deregulation that he argued would give banks more flexibility. “The private sector has been in recession.”