The Securities and Exchange Commission (SEC) is generally regarded as one of the smartest, toughest agencies in Washington. But tough enforcement is not a hallmark of the Trump administration, which has substantially cut the SEC’s budget and staffing. As a result, the SEC is bringing fewer enforcement actions. In fiscal 2025, the SEC filed 30% fewer stand-alone enforcement actions than in fiscal 2024, and stopped bringing certain kinds of enforcement cases ( for example, under the Foreign Corrupt Practices Act).

But something new and unprecedented is happening. At the end of May, the three SEC Commissioners, who are all Republicans, took away enforcement powers the agency has held for more than 50 years. Without notice or public comment, the SEC repealed its longstanding rule prohibiting defendants who settled enforcement cases “without admitting or denying” the SEC’s allegations from later publicly disagreeing with those allegations or the related facts.