SEC Chairman Atkins Says Agency Working to Fill "Gaps" Left by Large Staffing Cuts

SEC Will Fill ‘Gaps’ at Agency Following Drop in Enforcement, Atkins Says

U.S. Securities and Exchange Commission Chair Paul Atkins told a Senate panel Thursday that the commission would work to fill “gaps” at the agency left by large staffing cuts made at the start of the Trump administration. […]

Atkins testimony followed a 15% decline in SEC staff in 2025 as part of the administration’s broad effort to shrink the federal workforce, which impacted the commission’s Division of Enforcement. The SEC’s 313 enforcement actions in fiscal year 2025 were the fewest in a decade and down 27% from FY 2024, according to a report from Paul, Weiss, Rifkind, Wharton & Garrison and cited by Senate Democrats.

“You have deliberately cut enforcement,” Sen. Jack Reed, D-Rhode Island, told Atkins during an oversight hearing of the Senate Committee on Banking, Housing and Urban Affairs. “That’s part of the DOGE [Department of Government Efficiency] operation because it plays into the administration’s plan to weaken the controls on capital in the United States.”

Statement on Jury’s Verdict in Trial of Ismael Sanchez

Today, after a four-day trial, a jury in the United States District Court for the Southern District of Texas found defendant Ismael Sanchez liable for securities fraud and registration violations.

As shown at trial, Defendant Sanchez was a lead salesperson for CryptoFX, a large-scale Ponzi scheme that targeted approximately 40,000 investors by promising to trade investor funds in the crypto asset and foreign exchange markets, but in reality used investor money to make Ponzi payments, pay commissions to salespeople, and fund personal expenses. The office in Chicago that Sanchez led raised tens of millions of dollars from investors. The jury found Sanchez liable for securities fraud and registration failures under the federal securities laws.

Conversation and Cappuccino: A Securities Docket Debrief from NYC

Last week, I attended the annual NYC Securities Docket—where SEC alumni and securities professionals gathered over fancy embossed cappuccinos to compare notes on the “new” SEC and the broader securities enforcement and regulatory environment. Kudos to Bruce Carton and Securities Docket team for hosting an excellent event and upping the event game with an espresso bar. Now I am really feeling the host pressure for my events this spring.

The panelists, all experts, humbly acknowledged they don’t have a crystal ball, but their shared perspectives did surface several keen observations about what’s happening now—and what may be shifting under the surface. Below are the seven themes that stood out most to this accountant….

CFTC’s Enforcement Questioned by U.S. Senators in Wake of Staff Departures

Barron’s reported this week that the CFTC’s Chicago office had lost its last enforcement attorney, a team that previously consisted of 20 lawyers. Four of the office’s five chief trial attorneys were laid off on a single day last July, as was the division of enforcement deputy director.

“This diminished capacity will send bad actors the message that there will not be enough cops on the beat if they attempt to defraud or exploit our commodity and derivative markets,” Schiff says.

A CFTC spokesperson says those reductions in force were “aimed at reducing redundant reporting layers within middle management.”

In a Thursday statement to Barron’s, CFTC Chairman Michael Selig said: “Several employees left before my tenure, but we have appropriate resources throughout the country. And while we regulate activity across the country, we don’t have offices in every state. Regulatory agencies don’t operate like Starbucks. Most of our attorneys are at headquarters in Washington, with some employees in regional offices. We are always looking to add talent in key areas, and the door is open for those who want to join a great organization.”

SEC chair warns some prediction markets may fall under securities laws

Atkins said the legal status of prediction markets isn’t always clear. He noted that jurisdiction overlaps between the SEC and the Commodity Futures Trading Commission (CFTC).

“Prediction markets are exactly one thing where there’s overlapping jurisdiction potentially,” Atkins said.

Historically, the CFTC has been seen as the primary federal regulator for these markets. Atkins said the SEC may regulate some markets depending on how they’re structured, especially if contracts resemble securities.

“We have enough authority,” he told lawmakers, adding that a “security is a security regardless how it is and some of the nuance with prediction markets and the products depends on wording.”

SEC officials are reportedly meeting weekly with their counterparts at the CFTC.
CFTC Chair Michael Selig said regulators want a framework that protects market participants without pushing these platforms offshore.