SEC corporate enforcement hits multi-decade low as agency refocuses on fraud

The SEC's crackdown on public companies and their subsidiaries has slowed to a crawl, with new research showing the regulator initiated just five enforcement actions in the first half of fiscal year 2026; the lowest tally for any opening half of a fiscal year in at least 16 years.

The figures come from a Cornerstone Research report drawing on data compiled through the Securities Enforcement Empirical Database, a joint project between Cornerstone and the NYU Pollack Center for Law & Business.

While the five actions represent a modest climb from the three brought in the second half of fiscal 2025, the numbers remain historically depressed. Analysts caution, however, that the raw count alone doesn't tell the whole story.

"Nuance is important when comparing SEC enforcement action data," said Sara Gilley, Cornerstone Research securities litigation cohead and report coauthor. "SEC enforcement activity against public companies and subsidiaries remained near 16-year lows, but it's higher than the previous six months. Historically, the SEC tends to initiate more actions in the latter half of the fiscal year."

Of the five actions filed in the period, three named a public company as a defendant while the remaining two targeted only subsidiary entities. The three actions involving public company defendants all carried Issuer Reporting and Disclosure allegations — a category that has averaged 38 percent of annual actions over the past decade.

That focus appears to dovetail with the priorities signaled by SEC Chair Paul Atkins, who has stated publicly that the commission is returning its enforcement program to core principles of rooting out fraud and addressing investor harm. Atkins has specifically cited accounting and financial fraud as a priority area since rejoining the commission.

The two remaining actions each involved a single subsidiary defendant — one an investment adviser, the other an exchange.

Perhaps as striking as the filing numbers is a dismissal trend with no recent precedent. Three enforcement actions against public companies or subsidiaries have been dropped under the current administration — two in the first half of fiscal 2026 and one in the first half of fiscal 2025. No comparable dismissals had occurred in at least the prior 16 years.

The report was co-authored by Gilley alongside Cornerstone principals Heather B. Lazur and Evan Schweitzer.