In a speech outlining his initial agenda, the new Director of the U.S. Securities and Exchange Commission's Division of Enforcement said the division will return to a back to basics approach that emphasizes quality over quantity and targets conduct causing real investor harm. Speaking in his official capacity and noting the remarks do not necessarily reflect the Commission's views, he identified core priorities as offering fraud, accounting and disclosure fraud, insider trading, market manipulation, fraud by foreign actors targeting U.S. markets and investors, fiduciary breaches by advisers, and misconduct in private funds. The speech said enforcement in the investment adviser and private fund space will continue to cover misappropriated or inadequately safeguarded client assets, misleading strategy disclosures, undisclosed fees and expenses, fraudulent valuations or mismarking, prohibited trading practices, and undisclosed conflicts of interest. It also highlighted monitoring of liquidity, fee, valuation, and conflict risks across private markets, including private credit, and pointed to recent matters such as an alleged USD 770 million ATM offering fraud that produced roughly USD 400 million in investor losses, an approximately USD 41 million insider trading scheme tied to nine potential acquisitions, and ongoing complaints involving more than USD 275 million raised from over 250 investors. Operationally, the division is returning to a more collaborative posture with federal, state, and foreign counterparts and is formalizing information-sharing protocols, particularly with the Commodity Futures Trading Commission, while seeking to avoid unnecessary duplication. The Cross-Border Task Force established in September 2025 will continue to examine foreign-based issuers, gatekeepers, and schemes such as pump-and-dump and ramp-and-dump manipulation, and the Retail Fraud Working Group is to be reestablished as an early priority, with further details promised in the coming weeks. For firms under investigation, he said the staff will distinguish between honest mistakes and fraud, encouraged early pre-enforcement dialogue in gray areas, and said self-reporting, full cooperation, and remediation will affect treatment.
U.S. Securities & Exchange Commission 2026-05-13
U.S. Securities and Exchange Commission Enforcement Director outlines back to basics agenda and plans to reinstitute Retail Fraud Working Group
The U.S. Securities and Exchange Commission’s Division of Enforcement will pursue a “back to basics” agenda focused on quality over quantity and targeting conduct causing real investor harm, prioritizing offering, accounting and disclosure fraud, insider trading, market manipulation, foreign-actor fraud, fiduciary breaches by advisers, and misconduct in private funds. It will maintain intensive scrutiny of investment advisers and private funds, including client asset safeguards, strategy disclosures, fees, valuations, trading practices, and conflicts, while monitoring liquidity, fee, valuation, and conflict risks across private markets. It will also enhance collaboration with domestic and foreign authorities, continue the Cross-Border Task Force, reestablish the Retail Fraud Working Group, and factor self-reporting, cooperation, remediation, and the distinction between honest mistakes and fraud into enforcement decisions.