Recent SEC Administration Changes
SEC Announces Departure of OIEA Director Lori J. Schock
The Securities and Exchange Commission (the “SEC”) announced that Lori J. Schock, who had served as the Director of the Office of Investor Education and Assistance (“OIEA”) since 2009, retired from the agency at the end of December. Ms. Schock joined the SEC in 2001 as a Staff Attorney in OIEA. She also served as Special Counsel to the Director from 2002–2006 and as Acting Director and Deputy Director from 2006–2007. Ms. Schock oversaw the building of the SEC’s Investor.gov website, creating Investor Alerts and Bulletins, and writing numerous Director’s Take articles to provide investors with tips and information on topics such as building wealth and protecting their retirement money.
Joshua T. White Named SEC Chief Economist
The SEC announced on December 17, 2025, that Dr. Joshua T. White will return to the agency, effective January 5, 2026, to serve as Chief Economist and Director of the Division of Economic and Risk Analysis (“DERA”). Dr. White previously conducted cost-benefit analyses of SEC rulemaking between 2012 and 2018 while serving in various DERA roles including financial economist, visiting academic scholar, and expert consultant. For the past 18 months, he has been on leave from his position as assistant professor of finance at Vanderbilt University’s Owen Graduate School of Management to serve in the Office of Economic and Risk Analysis at the Public Company Accounting Oversight Board (“PCAOB”), where he was a senior advisor until he became acting chief economist this past April. Dr. White holds a B.S., M.B.A., and Ph.D. in finance from the University of Tennessee’s Haslam College of Business, where he is a past recipient of the Outstanding Ph.D. Alumnus Award.
SEC Rulemaking
SEC Issues Exemptive Order Regarding Compliance with Certain Rules Under Regulation NMS
The SEC issued an order on October 31, 2025, granting temporary exemptive relief from certain compliance dates adopted under Regulation NMS (“National Market System”): Minimum Pricing Increments, Access Fees, and Transparency of Better Priced Orders as follows:
- Rules 600(b)(89)(i)(F) and 612 of Regulation NMS implementing the amended minimum pricing increment: Until the first business day of November 2026.
- Rule 610(c) of Regulation NMS implementing the amended access fee caps: Until the first business day of November 2026.
- Rule 610(d) of Regulation NMS implementing the requirement that exchange fees be determinable at the time of execution: Until the first business day of February 2026.
The SEC also provided temporary exemptive relief to the exchanges from the requirement to file proposed rule changes to amend any exchange rules to reflect the round lot definition in Rule 600(b)(93) of Regulation NMS until 30 calendar days following the end of the lapse in appropriations.
SEC States It Will Not Respond to No-Action Requests Relating to Excluding Shareholder Proposals from Proxies
The SEC announced on November 17, 2025, that the Division of Corporation Finance, for the proxy season that runs from October 1, 2025, through September 30, 2026, will not respond to no-action requests asking for reassurance that the SEC will not bring an enforcement action if a company excludes a shareholder proposal from its annual proxy statement. The SEC cited the “current resource and timing considerations following the lengthy government shutdown and the large volume of registration statements and other filings requiring prompt staff attention” and the “extensive body of guidance” on circumstances under which shareholder proposals can be excluded from proxies as reasons for the change. The SEC noted, however, that the new policy will not apply to those no-action requests that cite Rule 14a-8 (i)(1), which permits companies to exclude a shareholder proposal if the proposal is not a proper subject for action by shareholders under state law. Under this new SEC policy, companies that plan to leave shareholder proposals off their proxy statements must still notify the SEC of that intention, but solely for “informational” purposes.
President Trump Signs Executive Order on Proxy Advisors
President Trump signed an executive order on December 11, 2025, titled “Protecting American Investors From Foreign-Owned and Politically-Motivated Proxy Advisors” (the “Executive Order”). The Executive Order’s stated purpose is to “increase oversight of and take action to restore public confidence in the proxy advisor industry, including by promoting accountability, transparency, and competition.” Among other things, the Executive Order instructs the SEC to:
- Review all rules, regulations, guidelines, bulletins, and memoranda relating to proxy advisors and consider revising or rescinding those that are inconsistent with the Executive Order’s purposes, especially to the extent that they implicate Diversity, Equity, and Inclusion (“DEI”) and Environmental, Social, and Governance (“ESG”) policies.
- Consider revising and rescinding all rules, regulations, guidance, bulletins, and memoranda relating to shareholder proposals that are inconsistent with the Executive Order’s purpose.
- Assess whether to require proxy advisors to register under the Investment Advisers Act of 1940, as amended.
- Examine whether the practice of registered investment advisers engaging proxy advisors to advise on non-pecuniary factors in investing, including DEI and ESG factors, is inconsistent with their fiduciary duties.
The full Executive Order can be found here.
SEC Enforcement Actions and Other Cases
SEC Charges Canadian Citizen with Fraud Schemes That Target Retail Investors on Discord
The SEC charged a Canadian citizen (the “Defendant”) and three entities he controlled on December 10, 2025, with orchestrating two fraudulent securities offerings that raised more than $18 million from investors across the United States and abroad. The Defendant allegedly misappropriated $6.3 million of investor funds and used fabricated credentials, false performance metrics, and fictitious account statements to lure investors into his schemes. According to the SEC’s complaint, the Defendant falsely presented himself as a successful investment professional managing over $1 billion in assets. In one scheme, the Defendant allegedly raised $18 million from investors through an unregistered offering of interests in a purported diversified investment fund advised by the Defendant. The Defendant then used that money for luxury concierge services, real estate, custom jewelry, and art. In the second scheme, the Defendant allegedly offered “seed stock” in one of his entities at $30,000 per share, falsely claiming the company had a $60 million valuation and more than $12 million in annual revenue. The complaint alleges that the company had no operations, assets, or revenues.
“[The Defendant] exploited the trust of his online followers to perpetrate a brazen fraud,” said Jaime Marinaro, Associate Director of the SEC’s Fort Worth Regional Office. “Investors should always verify the credentials of anyone offering investment opportunities, especially when those opportunities are promoted through social media or online communities.”
SEC Charges Three Purported Crypto Asset Trading Platforms and Four Investment Clubs with Scheme That Targeted Retail Investors on Social Media
The SEC, on December 22, 2025, charged three purported crypto asset trading platforms and four investment clubs (each a “Defendant” and collectively, the “Defendants”) alleging they defrauded retail investors out of more than $14 million in an elaborate investment confidence scam. The complaint alleges that the Defendants operated so-called investment clubs using WhatsApp and solicited investors to join the clubs with ads on social media. The clubs gained investors’ confidence with supposedly AI-generated investment tips before luring investors to open and fund accounts on purported crypto asset trading platforms, which falsely claimed to have government licenses. The Defendants then offered “Security Token Offerings” that were purportedly issued by legitimate businesses when, in reality, no trading took place on the trading platforms, which were fake, and the Security Token Offerings and their purported issuing companies did not exist.
“This matter highlights an all-too-common form of investment scam that is being used to target U.S. retail investors with devastating consequences. Our complaint alleges a multi-step fraud that attracted victims with ads on social media, built victims’ trust in group chats where fraudsters posed as financial professionals and promised profits from AI-generated investment tips, then convinced victims to put their money into fake crypto asset trading platforms where it was misappropriated,” said Laura D’Allaird, Chief of the Cyber and Emerging Technologies Unit. “Fraud is fraud, and we will vigorously pursue securities fraud that harms retail investors.”
Other Industry Highlights
SEC Division of Examinations Announces 2026 Priorities
The SEC’s Division of Examinations (the “Division”), on November 17, 2025, released its 2026 examination priorities. Certain of the priorities are summarized below.
Investment Advisers
- Adherence to Fiduciary Standards of Conduct
- The impact of advisers’ financial conflicts of interest on providing impartial advice;
- Advisers’ consideration of the various factors associated with their investment advice, such as the cost, the investment product’s or strategy’s investment objective, characteristics, liquidity, risks, and potential benefits, volatility, and time horizon; and
- Advisers seeking best execution with the goal of maximizing value for their clients under the particular circumstances occurring at the time of the transaction.
- Effectiveness of Advisers’ Compliance Procedures
- Evaluation of core areas of advisers’ compliance programs, which include marketing, valuation, trading, portfolio management, disclosure and filings, and custody; and
- Areas of focus include whether the policies and procedures are implemented and enforced; and whether disclosures address fee-related conflicts with a focus on conflicts that arise from account and product compensation structures.
- Moreover, the Division will focus on investment products with the following strategies or characteristics:
- Alternative investments (e.g., private credit and private funds with investment lock-up for extended periods);
- Complex investments (e.g., exchange-traded funds (“ETF”) wrappers on less liquid underlying strategies, option-based ETFs, and leveraged and/or inverse ETFs); and
- Products that have higher costs associated with investing (e.g., high commissions and higher investment expenses than similar products/investments).
Investment Companies
- Fund fees and expenses, and any associated waivers and reimbursements;
- Portfolio management practices and disclosures, for consistency with statements about investment strategies or approaches with fund filings and marketing materials, and the amended fund “Names Rule”;
- Registered investment companies that participate in mergers or similar transactions, including any associated operation and compliance challenges;
- Certain registered investment companies that use complex strategies and/or have significant holdings of less liquid or illiquid investments (e.g., closed-end funds), including any associated issues regarding valuation and conflicts of interest; and
- Registered investment companies with novel strategies or investments, including funds with leverage vulnerabilities.
The Division will continue its prioritization of never-before-examined advisers or investment companies, with particular emphasis on recently registered advisers or investment companies. The examination priorities also include areas of focus for broker-dealers, self-regulatory organizations, clearing agencies, and risk areas impacting various market participants, including assessing compliance with the 2024 amendments to Regulation S-P. The full Division of Examinations priorities report for the fiscal year 2026 can be accessed here.
“Examinations are an important component to accomplishing the agency’s mission, but they should not be a ‘gotcha’ exercise,” said SEC Chairman Paul S. Atkins. “Today’s release of examination priorities should enable firms to prepare to have a constructive dialogue with SEC examiners and provide transparency into the priorities of the agency’s most public-facing division.”
SEC Division of Examinations Published Additional Observations Regarding Advisers’ Compliance with the Advisers Act Marketing Rule
The SEC’s Division of Examinations issued a Risk Alert on December 16, 2025, addressing the staff’s observations regarding advisers’ compliance with the conditions set forth in the Testimonials and Endorsements Provisions (Rule 206(4)-1(b)) and Third-Party Ratings Provisions (Rule 206(4)-1(c)) of rule 206(4)-1 (the “Marketing Rule”) under the Investment Advisers Act of 1940, as amended.
Testimonials and Endorsements
- Clear and Prominent Disclosures – The staff observed advertisements that contained testimonials or endorsements that did not provide one or more of the required clear and prominent disclosures, such as whether the promoter (i.e., the person providing a testimonial or endorsement) was a current client or investor in a private fund advised by the investment adviser, and, if applicable, whether the promoter was paid cash or non-cash compensation and/or had a material conflict of interest.
- Disclosure of Material Terms of Compensation Arrangements – The staff observed advisers that did not disclose the material terms of compensation arrangements, including a description of the compensation provided directly or indirectly to the promoters for the testimonials or endorsements included in their advertisements.
- Disclosure of Material Conflicts – The staff observed advisers that did not disclose material conflicts resulting from the advisers’ relationships with promoters and/or the compensation arrangements for the testimonials or endorsements included in the advisers’ advertisements. For example, the staff observed advisers that did not disclose material conflicts resulting from promoters having financial interests in the promoted advisers, including clients of advisers who were also investors in the promoted advisers or who were principals or officers of other advisory firms that had sub-advisory or other significant arrangements with the promoted advisers.
- Oversight and Compliance – The oversight and compliance provisions for testimonials and endorsements require advisers to have a reasonable basis for believing that the testimonials or endorsements complied with the Testimonials and Endorsements Provisions (“reasonable basis for belief requirement”) and written agreements with paid promoters. The staff observed advisers that did not appear to comply with these provisions, observing that: (1) advisers were either unaware that certain arrangements involved statements that met the definition of an endorsement or were unable to demonstrate that they satisfied the reasonable basis for belief requirement; and (2) advisers did not enter into or maintain written agreements with paid promoters that described the scope of the agreed-upon activities and the terms of the compensation for those promotional activities.
- Ineligible Persons – The staff observed advisers that did not appear to comply with the prohibition on compensating ineligible persons for endorsements when the advisers knew, or in the exercise of reasonable care should have known, that the promoters were ineligible persons when the endorsements were disseminated.
- Promoter Affiliated with the Adviser – The staff observed advisers using promoters affiliated with the advisers that did not meet disclosure and agreement requirements of the Testimonials and Endorsements Provisions and did not meet the conditions of the exemption from the disclosure and written agreement requirements afforded to testimonials or endorsements by certain individuals associated with the advisers.
Third-Party Rating Provisions
- Policies and Procedures – The staff observed advisers using third-party ratings without appearing to comply with all or some of the requirements for use of third-party ratings. Such third-party ratings were often included on advisers’ websites (including d/b/a websites), as well as social media profiles or accounts, marketing brochures or pitchbooks, press releases, newsletters, and blogs, among others. While the staff observed that many advisers utilizing third-party ratings in advertisements updated their compliance policies and procedures to address this practice, others had not. Some of the advisers that did not update their policies, as well as advisers that had updated their policies and procedures but did not implement them, disseminated advertisements that did not appear to comply with the Marketing Rule.
- Due Diligence – The staff observed advisers using several methods to demonstrate that third-party ratings included in advertisements were in compliance with the Third-Party Rating Provision’s “due diligence requirement” (i.e., the requirement to have a reasonable basis for believing that questionnaires or surveys used in the preparation of the third-party ratings were structured to make it equally easy for a participant to provide favorable and unfavorable responses and were not designed to produce any predetermined results).
- Clear and Prominent Disclosures – The staff observed advisers that included third-party ratings in advertisements without providing some or all of the required clear and prominent disclosures. These advisers also did not appear to have a reasonable belief that the third-party ratings made such disclosures clearly and prominently.
The Division of Examinations’ full Risk Alert can be accessed here.
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