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- Enforcement Staff Takes Hit in SEC's Requested Budget for FY 2026
Enforcement Staff Takes Hit in SEC's Requested Budget for FY 2026
Plus the SEC, Ripple and a federal judge remain in a standoff over reducing penalty.
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Bruce Kelson has joined Buchalter as a partner in the firm’s San Francisco office.

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Fiscal Year 2026 Budget Request
On May 30, I submitted to Congress the agency’s fiscal year (FY) 2026 budget request. I am pleased to support President Trump’s request of $2.149 billion for SEC operations. This request reflects the focus on returning to the core mission that Congress set for the agency as well as the resource needs for the Crypto Task Force. This budget level is flat as compared to both the FY 2025 and FY 2024 enacted funding levels.
The budget request contemplates approximately 4,100 full-time equivalents (FTEs), which is a net reduction of 447 FTEs compared to the FY 2025 level due to attrition following early retirement and buy-out offers in calendar 2025. At this lower FTE level, the budget request actually is approximately $100 million more than the amount that would be required to maintain our current state of operations. There is some uncertainty regarding the FY 2026 budget, including the potential transfer of the functions of the Public Company Accounting Oversight Board (PCAOB) into the SEC. If Congress approves this budget request, we anticipate that this funding could support such a transfer of the PCAOB functions into the SEC in FY 2026.
👉 The SEC is seeking an extra $100 million in case Congress transfers the PCAOB’s functions to the SEC in FY 2026. 👀
The SEC’s Congressional Budget Justification is here (thank you to Robert Howard of Davis Wright Tremaine for sending this to me). As noted on page 7, the number of Full-Time Equivalents in the Enforcement budget for FY 2026 is 1,178. This is down from 1,424 in FY 2024 and 1,304 in FY 2025.

Ripple Locked in Standoff With Judge Blocking SEC Crypto Accord
Ripple Labs Inc. and the SEC have limited options to achieve a settlement in a Biden-era enforcement suit that’s in limbo after a recent court decision.
Now controlled by a Trump administration appointee, the Securities and Exchange Commission wants to take less money from Ripple and toss an injunction against the blockchain infrastructure company instead of litigating cross-appeals. The problem is that there’s a final judgment in place—and the federal judge who issued it refused to play ball in a recent ruling.
Attorneys are divided on whether that decision is a serious impediment or a mere bump in the road. “If there was an easy answer for the parties, they had two weeks to file something. And they haven’t,” said Andrew Balthazor of Holland & Knight LLP. “So that says to me that this may not be as quick a fix as they possibly thought.”
“It’s a short-term hurdle,” countered Keri Axel of Waymaker LLP, who has a white-collar and enforcement defense practice. “Cases settle on appeal all the time,” she said. “The parties are going to find a way to resolution.”
👉 This is an interesting situation. Both sides are now asking Judge Torres to reduce the $125 million civil penalty she imposed on Ripple in August down to $50 million. The only real reason, as Andrew Balthazor observes in the article, is a “change in presidential administration and a change in enforcement priorities.” That, however, may not be sufficient because the “laws haven’t changed just because there is a new presidential administration or new view on how those laws should be enforced.”
Keri Axel notes that “the judge is frustrated with the enforcement agency…. Its job is to enforce, and it put her through all the work. Then it did a 180.”
The SEC Speaks: Is Anyone Listening?
Sam Waldon, the Acting Director of the Division of Enforcement acknowledged the basic math: 15% fewer staff means doing more with less. He also acknowledged the move to process all formal-order requests through the Commission itself, a time-consuming procedure as history teaches. He wrote off one other change as cosmetic – the elimination of the nine regional director positions – with three new “deputy” directors organized by region and the fourth in charge of the specialized units. (The three regions are the Northeast, the Southeast, and the West – highly reminiscent of the famous Sol Hirschfield New Yorker cover depicting everything west of the Hudson River as “The West.”)
The tenor of the other speakers was largely one of back-to-basics, with the acting directors hesitant to say exactly what that will look like. Still, some observations can be made.
👉 Article by Richard Levan of Dailey LLP
Deepfake equity analysts hint at the future of finance
… An experiment by UBS raises the question of whether the humanity in high finance is overrated.
The Swiss bank has digitally cloned about three dozen of its equity analysts, generating short videos presented by lifelike avatars. They perform scripts based on the analyst’s research notes, complete with hand gestures and eyebrow raises. The AI is good but not perfect, so the result is slightly unheimlich. Still, the bank says the videos perform as well with clients as the old-fashioned kind. […]
A common catchphrase on Wall Street, therefore, is “human in the loop”. That means a pair of biological eyeballs scanning everything destined for a client. UBS follows that principle too: in the case of its avatars, analysts review both script and final video. As they should, because in highly regulated industries, humans bear the brunt of mistakes, as well as the risk of clawed-back pay or professional bans.
👉 I couldn’t find a video of an AI avatar/equity analyst at work. If you have one, please send it to me!
May you always be the “human in the loop.”
SEC Cautions Companies on Risks AI Poses to Financial Reporting
AI-based financial reporting introduces new risks, and the SEC is monitoring how US companies and their auditors are using the emerging tech.
Risk assessments and the ability to retrace the steps of new artificial intelligence algorithms will be key safeguards to address potential vulnerabilities as companies and their auditors adopt the emerging tech for their financial reporting, Anita Doutt, acting deputy chief accountant for professional practice at the Securities and Exchange Commission, said Tuesday at an American Law Institute conference.

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France just charged 25 people including 6 minors in a crypto kidnapping case!
— MASON VERSLUIS (@MasonVersluis)
9:25 PM • Jun 3, 2025
🚨OUT TOMORROW: @Scaramucci joins Crypto In America to drop all his hot takes, including this one on reducing @SBF_FTX’s sentence.
“Is 25 years too steep of a price? I think it is.”
— Crypto In America (@CryptoAmerica_)
1:07 AM • Jun 4, 2025
Pls fix. Not weekend work - just need it Mon AM. Thx.
@ThisGuyFuchz
— James Ramey (@jramey000)
5:59 PM • May 16, 2025