by Norman Harrison

Since Paul Atkins became Chairman of the U.S. Securities and Exchange Commission (SEC) on April 21, 2025, the SEC has announced significant pivots in its approaches to enforcement, regulatory guidance, investment adviser oversight, and other areas. Chairman Atkins’ brief tenure has already been marked by a deregulatory philosophy that emphasizes investor choice, streamlines enforcement priorities, and retreats from numerous rulemaking initiatives commenced during the term of his predecessor, Gary Gensler.

This article describes some of the most consequential policy and regulatory changes to date, as well as their implications for issuers, fund managers, and investors.

New Enforcement Focus: Fraud Over Formalities

Chairman Atkins has redefined the SEC’s enforcement priorities, reflecting his long-held view that the Commission had become overly expansive in its approach to enforcement – for example, by penalizing firms for technical errors such as books and records violations, rather than substantive wrongdoing involving fraudulent conduct. In his first address to SEC staff after he was sworn in, Chairman Atkins stated: “We are returning to our core mission that Congress set for us. All of us can recite the familiar three-part mission enunciated by Congress in the Exchange Act: protecting investors; furthering capital formation; and safeguarding fair, orderly, and efficient markets.”

Based on recent remarks by Chairman Atkins and other Commissioners, we can expect the SEC to:

• Focus primarily on traditional securities laws violations such as insider trading, accounting and securities fraud, market manipulation, and breaches of fiduciary duties;
• Withdraw from pursuing cases related to minor disclosure failures or process errors; and
• Reassess the role and nature of Commission oversight of Administrative Law Judges following the recent Jaresky decision,[1] which held that the use of ALJs in enforcement actions seeking civil monetary penalties violated Defendants’ Seventh Amendment right to a jury trial.

Reversing Course: Withdrawal of 14 Proposed Rules

One of Chairman Atkins’ first major actions was to rescind fourteen proposed rules relating to investment adviser disclosure obligations and broker-dealer regulation carried over from the Gensler era. These included initiatives targeting climate-related disclosures, cybersecurity risk governance, AI-based investment advice, and expanded derivatives and private fund reporting.[2]

For issuers and investment funds, this means a significant reduction in new reporting obligations. Many issuers and asset managers had already begun preparing for enhanced disclosure requirements, particularly those relating to ESG practices and AI-related investor interaction. The ESG disclosure proposal was especially controversial, given its scope and detail, including:

• climate-related risks likely to materially impact  the registrant’s business strategy, results of operations, or financial condition;
• actual and potential material impacts of such risks on the registrant’s strategy, business model, and outlook; and
• quantitative and qualitative disclosures of material expenditures and impacts on financial estimates and assumptions that directly result from such an issuer’s planned mitigation or adaptation activities relating to material climate risks.

“Crypto 2.0”: A Shift in Digital Asset Oversight

The SEC has introduced a more accommodative framework for regulatory oversight of digital assets. Dubbed “Crypto 2.0,” this new roadmap emphasizes regulatory clarity over enforcement-by-litigation – i.e., the practice which Chairman Atkins has long disfavored.

In January 2025, Acting SEC Chairman Mark Uyeda announced the formation of a Crypto Task Force with the objective of “help[ing] the Commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.”[3] 

In recent remarks at a roundtable hosted by the Task Force, Chairman Atkins emphasized that “A key priority of my Chairmanship will be to develop a rational regulatory framework for crypto asset markets that establishes clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors from violating the law.”[4]  He reiterated his three key priorities relating to crypto regulation:

• Registration and issuance: Directing SEC staff to consider whether additional guidance, registration exemptions, and safe harbors are needed to better facilitate public offerings of crypto assets.
• Custody: Promoting greater optionality for asset custody and reversing controversial SEC guidance such as Staff Accounting Bulletin 121 (SAB 121), which required crypto custodians to record the fair value of crypto assets as both a liability and a corresponding asset on their balance sheets.
• Trading:  Supporting broader product offerings and asking staff to modernize Alternative Trading System regulations and access whether further guidance or rulemaking is needed for exchange listings.

These initiatives could be transformative for crypto asset managers, and for investment funds exploring blockchain-based assets. With less regulatory ambiguity and potentially reduced enforcement risk, digital asset strategies could become more mainstream.

Easing Access to Private Funds and Capital Formation

Chairman Atkins has also signaled strong support for policies that facilitate capital formation, particularly in the private markets. He plans to revisit a 23-year-old SEC policy requiring closed-end funds with 15% or more of assets under management invested in private funds to impose a $25,000 minimum investment and limit access to “accredited” investors. He has expressed concern that these restrictions have denied many retail investors access to closed-end funds that invest in hedge funds and private equity funds.

Other initiatives under consideration relating to private funds include:

• liberalizing Reg D exemptions, to facilitate capital formation through private placements; and
• repealing 2024 amendments to Reg PF that imposed new and more detailed disclosures on private funds relating to portfolio exposures, margin activity, and investment performance by strategy.

Self-Reporting, Cooperation and Remediation

Chairman Atkins has long been a proponent of providing incentives for registrants to self-report potential securities law violations and cooperate with Commission Staff during its investigation. The Enforcement Division recently confirmed that Staff may decline to bring actions against violators who self-disclose and fully remediate misconduct. Consistent with Chairman Atkins’ views, no cooperation credit will be given to companies that waive attorney-client privilege or work product protections, because, in his view, doing so serves to punish companies that do not.

Conclusion: Back to Basics

Chairman Atkins’ view of his mandate is best summarized as a return to core principles: protecting individual investors from fraud, supporting market efficiency, and exercising restraint in imposing new regulatory obligations that do not advance the SEC’s historic mission. This will result in a significantly changed enforcement landscape for issuers and investment funds, with fewer pending rulemakings, reduced disclosure burdens, and new opportunities in digital assets and private market capital formation.

While the SEC’s regulatory scope may narrow, it would be a mistake for registrants to conclude that Chairman Atkins’ SEC will tap the brakes on holding wrongdoers accountable.  In fact, issuers and investment advisers would be well advised to consider how the changes described above warrant a closer look at their risks of securities law violations and corresponding compliance procedures and internal controls. 

Public companies should review their enterprise risk assessment processes to ensure closer alignment with the SEC’s revised enforcement focus.  They should also reassess the sufficiency of their internal controls relating to financial accounting, market manipulation, and insider trading. If the Commission expands access to private equity and hedge funds, managers of closed-end funds should ensure that their disclosure policies and anti-fraud controls are well-adapted to a wider population of possibly less sophisticated retail investors.  Lastly, given Chairman Atkins’ focus on voluntary self-reporting, all registrants should ensure that their whistleblower policies fulsomely encourage reporting and provide protection against retaliation, and are backed by robust internal investigative procedures.

[1] Securities & Exchange Commission v. Jarkesy, 603 U.S. ___ (2024) (No. 22‑859).
[2] 90 Fed. Reg. 25531 (Withdrawal of Proposed Regulatory Actions), June 17, 2025.
[3] https://www.sec.gov/newsroom/press-releases/2025-30
[4] https://www.sec.gov/newsroom/speeches-statements/atkins-remarks-crypto-roundtable-tokenization-051225-keynote-address-crypto-task-force-roundtable-tokenization