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SEC Enforcement Actions Fall to Historic Low in FY 2026

In a surprising turn of events, the U.S. Securities and Exchange Commission (SEC) has noted a staggering 71% reduction in enforcement actions taken against public companies and their subsidiaries during the fiscal year 2026. With only 16 actions initiated, this marks the lowest total recorded since the inception of tracking these activities by the Securities Enforcement Empirical Database (SEED) in 2010.

According to the latest report released by Cornerstone Research and the NYU Pollack Center for Law & Business, the previous fiscal year had seen 56 enforcement actions, highlighting a significant decline in regulatory activity. This drop represents the largest year-over-year change ever documented by the SEED. Notably, the financial repercussions resulting from these actions also reached an unprecedented low, totaling $184 million — over $600 million less than the previous fiscal year's total.

“Such dramatic declines in both the number of enforcement actions and overall monetary settlements were unexpected,” remarked Stephen Choi, a coauthor of the report and an esteemed law professor at NYU. Choi suggests the focus under the leadership of Chair Gary Gensler, aiming for more qualitative enforcement rather than sheer volume, may explain the findings.

Sara Gilley, another coauthor from Cornerstone Research, further explained that the SEC's priorities under current leadership are becoming clearer. In FY 2026, a substantial 50% of SEC’s enforcement actions against public companies were connected to allegations surrounding issuer reporting and disclosure. This is a marked increase from 39% in FY 2025, revealing a shift in enforcement focus that aligns with overall regulatory trends.

Interestingly, the SEC did not initiate any enforcement actions related to the Foreign Corrupt Practices Act (FCPA) this year. This absence marks 2026 as the first year without an FCPA complaint against a public entity or its subsidiary, despite previous averages indicating that such cases constituted about 10% of annual actions.

Other key insights from the report reveal:

• - Civil actions emerged as a larger segment of enforcement, with four of the 16 actions classified as civil — the highest proportion since FY 2013.
• - The number of defendants receiving monetary settlements fell sharply, with only 63% of settling defendants reporting a monetary settlement, the lowest rate since FY 2010, compared to an average of 92% from FY 2017 to FY 2025.
• - No public company or subsidiary admitted guilt in 2026, reversing a trend that had seen some admissions since 2021.
• - Total disgorgement and prejudgment interest sank to $1 million, showcasing a drastic decline—approximately $100 million less than the previous year’s low.

The report indicates that civil penalties made up nearly all monetary settlements in FY 2026, comprising 99%, which is the highest percentage recorded in the SEED. These findings emphasize a critical transformation in the nature of SEC enforcement actions, focusing more on quality over quantity.

The data collated within the SEC Enforcement Empirical Database, a joint effort by Cornerstone Research and NYU, compiles comprehensive information about enforcement actions against public companies on major U.S. exchanges and their subsidiaries. The data continues to be an invaluable resource for understanding trends in SEC enforcement activity alongside fostering insights into compliance and regulatory measures in the business environment.

With this historical downturn in enforcement actions, observers will be keenly monitoring how the SEC adjusts its priorities moving forward and whether such trends may lead to changes in corporate behavior regarding compliance and reporting standards.