SEC Enforcement Division signals shift in priorities under new leadership

Margaret “Meg” Ryan, the newly appointed Director of the United States Securities and Exchange Commission (SEC)’s Division of Enforcement, delivered her first public address since assuming leadership of the Division last August.

Speaking at the Los Angeles County Bar Association’s 56th Annual Securities Regulation Seminar on February 11, 2026, Director Ryan outlined the Division’s priorities, enforcement philosophy, and procedural expectations. Her remarks signal a significant recalibration of the SEC’s enforcement approach, with potential implications for regulated entities and their counsel.

In this alert, we discuss each of the SEC’s key enforcement priorities and provide key takeaways.

Key enforcement priorities

• Fewer enforcement actions for routine violations: In a notable departure from recent practice, Director Ryan stated that many violations of federal securities laws – particularly those concerning reporting requirements, recordkeeping, internal accounting controls, and broker-dealer or investment adviser fiduciary and financial responsibility obligations – should not necessarily result in enforcement actions.
  
  
• “Middle ground” approach for non-fraud violations: Where fraud is absent, but compliance has failed in a way that poses risks to investors, risks to market integrity, or yields a benefit to the participant, the Division may still pursue enforcement. However, Director Ryan indicated that such situations may also “present opportunity” for resolutions that “recognize wrongdoing while rectifying the violation or charting a firmer path toward compliance.” She noted that where other SEC divisions can “identify, educate, and help people and entities remediate the problem or deficiency,” that approach may be preferable to enforcement.
  
  
• Continued priority on fraud and market integrity violations: While signaling a softer approach to technical violations, Director Ryan made clear that the Division remains focused on combating fraud. Specifically, the Division will continue to prioritize scams that harm retail investors, including those that target retirement savings or undercut progress toward saving for homes or education. Additionally, the SEC will continue to pursue violations that undermine market integrity, including accounting fraud, insider trading, wash trading, and market manipulation schemes.
  
  
• Commitment to the Wells process: Director Ryan highlighted the Division’s commitment to the Wells process as a mechanism for transparency and fairness. According to recent changes announced by SEC Chair Paul S. Atkins, Wells recipients now have a four-week window to submit a response explaining why the Commission should decline the staff’s recommendation to authorize an enforcement action. Director Ryan assured practitioners that all Wells submissions “will be read and carefully considered,” and that a member of the enforcement senior leadership team will attend every Wells meeting. She emphasized that a “compelling Wells submission can and may make a difference both at the enforcement recommendation stage and when the Commission is determining how to vote on an enforcement recommendation.”
  
  
• Warning against delay tactics: Despite the emphasis on fair process, Director Ryan cautioned the defense bar not to “mistake fairness for weakness.” She warned that “deliberate circumvention of the process, including tactical tardiness and other games, will not be tolerated.” She stated that “counsels’ incentives, financial or otherwise, to prolong an investigation (and then complain about how long the investigation took) will be met by steadfast commitment to reasonable and timely resolution.”

Takeaways

Director Ryan’s remarks have notable implications for SEC investigations in the current administration. In matters involving allegations of fraud – particularly those involving alleged harm to retail investors or market manipulation – Director Ryan is indicating the SEC will likely continue to rigorously use its enforcement tools.

However, for companies facing potential enforcement for non-fraud violations – particularly those involving technical reporting, recordkeeping, or compliance failures – Director Ryan’s approach signals a potential opportunity for more favorable resolutions.

SEC policy, as reflected in its “Seaboard” factors, already provides incentives for companies and individuals to cooperate with the SEC in return for more favorable treatment. Director Ryan is suggesting that companies may find a receptive audience and possibly more favorable resolutions that emphasize remediation over punishment or outright declinations, subject to the specifics of the case.

Accordingly, companies under investigation or anticipating SEC scrutiny are encouraged to consider the following steps.

1. Evaluate whether company conduct falls into the “middle ground” category, where the absence of fraud may support a cooperative resolution rather than contested enforcement. It may be preferable to try to resolve these types of claims expeditiously, rather than risk future SEC leadership by taking a different approach to these types of matters.

2. Invest meaningfully in the Wells process, given senior Division leadership’s commitment to review and carefully consider all Wells submissions.

3. Take affirmative steps to avoid staff scrutiny of delay by the defense team; cooperation and timely engagement may be viewed more favorably, while perceived obstruction could provoke a more aggressive response.

For more information, please contact the authors.