The SEC Division Of Enforcement – 'With Great Power Comes Great Responsibility'

Key Takeaways

• On Feb. 11, 2026, Director of the U.S. Securities and Exchange Commission (SEC) Division of Enforcement, Margaret Ryan, made her first public remarks during the Los Angeles County Bar Association's 56^th Annual Securities Regulation Seminar and discussed the direction in which the Enforcement Division is headed.¹ She focused on principles, process and priorities.
• Principles:  Director Ryan highlighted integrity, honor, fidelity to the law, and an unwavering commitment to the fair and judicious use of the power and resources entrusted to the Enforcement Division by the federal government.
• Process: Director Ryan spoke of the Division's commitment to providing transparent and appropriate process to those under investigation, demonstrated by adhering to the Wells process and the recent changes made to that process to promote fairness and transparency.
• Priorities:  Director Ryan stated that reports claiming that enforcement work at the SEC has been tossed to the wayside are flat out wrong, and she emphasized that the Enforcement Division remains committed to investigating and deterring scams that inflict devastating costs on retail investors and misconduct that undermines market integrity, including accounting fraud, insider trading, wash trading and market manipulation schemes.

Guiding Principles

Calling on her experience as a Marine, law clerk and as a judge, Director Ryan spoke of integrity, honor, fidelity to the law, and an unwavering commitment to the fair and judicious use of the power and resources entrusted to the Enforcement Division by the federal government. Director Ryan reminded the audience of the common wisdom that “with great power comes great responsibility.” She stated that she is acutely aware of the criticisms of how the Enforcement Division operated in the past, some of which she believes are valid and warrant a course correction, but she will not let the Division be weighed down by criticism that is misinformed, has been remedied, or only exists as historical artifact.

Process

Turning to process, Director Ryan confirmed the Enforcement Division is committed to providing transparent and appropriate process to individuals and companies under investigation. One of the ways the Division demonstrates this commitment is by adhering to the Wells process. Echoing remarks Chairman Atkins made in October regarding the Wells process,² Director Ryan referred to the four-week window that proposed defendants or respondents now have to make a Wells submission and the meaningful opportunity afforded to meet with Enforcement leadership to “make their case.” “A member of the enforcement senior leadership team will attend every Wells meeting,” Director Ryan stated, and she assured that all Wells submissions will be read and carefully considered and are also provided to the Commission.

Director Ryan concluded her remarks on process with a warning to the defense bar: Do not mistake fairness for weakness. The Staff are seeking to move expeditiously and make recommendations within reasonable time periods while at the same time being committed to professional courtesy, consideration and, where possible, flexibility. Deliberate circumvention of the process, she warned, including tactical tardiness and other games, will not be tolerated and attempts by counsel to prolong an investigation will be met by a steadfast commitment to reasonable and timely resolution.

Enforcement Priorities

Turning next to priorities, Director Ryan said that first and foremost, the Enforcement Division remains focused on its mission to vigorously enforce federal securities laws in accordance with Chairman Atkins' focus on returning to the basics, with fairness and a focus on the timely resolution of cases. She attested to the fact that the Staff are truly doing good work on behalf of the American people. “Put another way,” she said, “reports that enforcement work at the SEC has been tossed to the wayside are not only greatly exaggerated but flat out wrong.” She is, however, more concerned with the quality and impact of enforcement actions rather than with chasing numbers and will continue to focus on bringing cases that further the SEC's core mission.

Second, Director Ryan confirmed that a principal focus of the enforcement program is to protect investors from the myriad fraud schemes cooked up by bad actors, which she noted Chairman Atkins refers to as the liars, cheats and thieves. This includes identifying, rooting out and remedying scams, particularly those that inflict devastating costs on retail investors. The Enforcement Division's work will continue to focus on uncovering and deterring fraud that wipes out American investors' retirement savings or that undercuts their progress toward saving for a home or for their children's education. Likewise, the Enforcement Division will continue to charge violations of the securities laws for misconduct that undermines market integrity, including accounting fraud, insider trading, wash trading and market manipulation schemes.

Third, Director Ryan focused on compliance with other provisions of the federal securities laws, such as a public company's reporting requirements and its obligations to maintain adequate books and records and devise and maintain systems of internal accounting controls, or a broker-dealer or investment adviser's obligation to adhere to its fiduciary duties and financial responsibility rules. Violations of these obligations are not necessarily on par with fraud, Director Ryan observed, and she is confident that many violations of these provisions should not, and do not, result in enforcement actions. However, there is a middle ground, she noted, where fraud is absent but compliance has failed in a way that poses risks to investors or market integrity that may warrant enforcement action, or it may present another opportunity. Such an opportunity may be to craft thoughtful resolutions in an appropriate case that recognize wrongdoing while rectifying the violation or charting a firmer path toward compliance.

The day after Director Ryan's remarks, Feb. 12, Chairman Atkins gave testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs.³ Echoing many of the sentiments from Director Ryan's remarks, Chairman Atkins stated that since he rejoined the SEC last year, the Commission has brought enforcement actions to address offering frauds, insider trading, accounting and financial frauds, and breaches of fiduciary duty by investment advisers. He also referenced the announcement of the Division of Enforcement's Cross-Border Task Force to strengthen and enhance the Commission's efforts to identify and combat cross-border fraud. Chairman Atkins, and by extension Director Ryan, have stated loud and clear that the SEC is returning its enforcement program to “first principles of rooting out fraud and remedying investor harm.”

Footnotes

1. Margaret Ryan, Director, Division of Enforcement, Remarks to the Los Angeles County Bar Association (Feb. 11, 2026), https://www.sec.gov/newsroom/speeches-statements/margaret-ryan-02-11-26-remarks-los-angeles-county-bar-association?utm_medium=email&utm_source=govdelivery.

2. Paul S. Atkins, SEC Chairman, Keynote Address at the 25th Annual A.A. Sommer, Jr. Lecture on Corporate, Securities, and Financial Law (Oct. 7, 2025), https://www.sec.gov/newsroom/speeches-statements/atkins-100925-keynote-address-25th-annual-aa-sommer-jr-lecture-corporate-securities-financial-law;  see also  BakerHostetler, SEC Defense Process Redefined – Chairman Atkins Announces Changes to Wells Process and Other Enforcement Policies (Oct. 16, 2025), https://www.bakerlaw.com/insights/sec-defense-process-redefined-chairman-atkins-announces-changes-to-wells-process-and-other-enforcement-policies/.

3. Paul S. Atkins, Chairman, Testimony Before the U.S. Senate Committee on Banking, Housing, and Urban Affairs (Feb. 12, 2026), https://www.sec.gov/newsroom/speeches-statements/atkins-testimony-sbhuac-021226.

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