The Securities and Exchange Commission's new enforcement approach is focused on "not quantity of cases, but on quality of cases," the agency's chairman, Paul Atkins, said Monday at the Milken Institute's 2026 Global Conference.
In previous years, Atkins said, "the agency was focusing on, for example, the lack of saving of text messages and what not at various financial services firms. There's not one instance in the sweep that the SEC did where they found fraud or manipulation of the markets due to those sorts of issues."
The SEC itself "had exactly the same problem going on itself that it had identified with the various players in the marketplace," Atkins continued. "That's not the way a regulator should work."
The agency brought more than 90 cases and ordered more than $2.2 billion in fines in a yearslong probe of firms' use of texting from personal phones and messaging from unapproved apps.
David Woodcock started Monday in his new role as head of the agency's Division of Enforcement.
"It's really great to have David Woodcock join us," Atkins said. "I've known him for years and he's very competent and accomplished and he's aligned on the goals for the division."
ETF Tax Break
The SEC, under Atkins' leadership, took action last September to allow mutual funds to offer ETF share classes. The SEC issued broad exemptive relief in March.
In early February, Atkins wrote an op-ed in The Washington Post stating that the new relief "is a huge tax break for millions of investors."
SEC economists, Atkins said Monday, "estimated maybe $150 million or so per year at least" in tax breaks.
The relief, Atkins continued, "is focused on allowing mutual fund families to have ETF sleeves. It's all about the tax laws, and mutual funds are not necessarily very tax advantageous, ETFs have advantages. So basically through this change of our approach and allowing them to set up ETF sleeves to mutual funds, we'll be able to create huge advantages for investors."
Atkins wrote in the op-ed: "Though it's too early to say with certainty how this will unfold, it is not unreasonable to anticipate a decidedly significant capital gains tax reduction."
Private Credit
The agency is "monitoring it carefully," Atkins said. "We have a special role to play because our jurisdiction with respect to fraud and manipulation and the sale of securities extends to private markets as well."
The SEC is also "examining various firms, just like we would normally, in that particular sector; there have been allegations of fraud ... and we are investigating that as well."
The Financial Stability Oversight Council, which includes the SEC, doesn't see private credit as "a systemic risk at this time, but we're monitoring that," Atkins said.
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