SEC and CFTC Enforcement Updates
SEC and CFTC rescind 'no-deny' settlement rules and announce changes to disgorgement policies
Recent updates from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have significant implications for corporate enforcement, as outlined in the 2026 Mid-Year Update on SEC and CFTC Enforcement by Sher Tremonte. The SEC and CFTC have rescinded their decades-old “no-deny” settlement rules, and announced they will not enforce existing “no-deny” provisions, marking a shift in their approach to enforcement actions. This change comes as the Supreme Court unanimously confirmed that the SEC may obtain disgorgement without proving that investors suffered pecuniary loss, a decision that will likely impact the way companies approach settlements.
The Federal Reserve Board has also been active in enforcement, with recent actions including the issuance of an enforcement action and the announcement of the termination of enforcement actions, as reported on the Federal Reserve Board's news and events page. Additionally, the SEC has made changes to its leadership, with the appointment of Gibson Dunn partner David Woodcock to run the enforcement unit, a move that comes as the agency accelerates its business-friendly deregulation drive, according to the Financial Times. This shift in approach has raised questions about the impact on investors and the overall effectiveness of regulatory oversight.
The SEC is also considering a rule change that could potentially eliminate the quarterly earnings report, a move that could have significant implications for investors and the way companies report their financial performance. As reported by The New York Times, this change could stir debate among investors and companies alike. Furthermore, the SEC's decision to settle a recent court action has raised eyebrows, particularly given the seriousness of the violation of securities laws alleged against the defendant. This decision has led some to question the agency's commitment to enforcing securities laws and protecting investors.
In related news, the recent decline in chip stocks has highlighted the ongoing volatility in the tech sector, while efforts to enforce AI healthcare regulations have shown the complexities of regulating emerging technologies. Meanwhile, the success of the US Trade Fraud Task Force in recovering over $1 billion in trade fraud cases demonstrates the importance of effective enforcement in protecting businesses and consumers. As companies navigate these complex regulatory landscapes, they must also contend with the expiration of warrants, such as the SPLASH BEVERAGE GROUP INC Warrant, which expired worthless in June 2026, according to Robinhood's corporate actions tracker.
As I reflect on the latest SEC and CFTC enforcement updates, I firmly believe that the current regulatory framework is in dire need of reform. My thesis is that without significant changes, these agencies will continue to prioritize punitive measures over proactive guidance, ultimately hindering innovation and growth in the financial sector. If nothing changes, the only winners will be the lawyers and consultants who reap the benefits of navigating the complex and often ambiguous regulatory landscape, while honest businesses and investors are left to bear the costs of compliance and uncertainty.
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