The SEC’s Enforcement Division Director Margaret Ryan recently delivered her first public remarks which provide helpful insight into the division’s priorities under her leadership. Director Ryan outlined her guiding principles, approach to the enforcement process, and substantive priorities. These were her first public remarks since becoming Director of the SEC’s Enforcement Division in September 2025.
Consistent with her military and judicial background, Director Ryan emphasized that the division would be “committed to providing transparent and appropriate process to individuals and to companies under investigation by Enforcement” and to “the fair and judicious use of the formidable power and resources” of the federal government. During her remarks, she addressed criticisms that the Enforcement Division received under the prior administration, some of which, she agreed, were valid points that warranted evaluation and course correction.
With respect to process, Director Ryan outlined several key points and changes that the division is making to the SEC’s Wells process. The SEC’s Wells process involves formal process under which a party receives notice at the end of an investigation of the staff’s intent to seek authorization to file an enforcement action against them and provides the recipient with an opportunity to make a submission explaining their positions on the merits before an action is filed. Director Ryan reiterated a previous change in the process announced by Chairman Atkins that Wells recipients will now have four weeks, compared to two, to respond to the notice as well as an opportunity to meet with senior enforcement leadership to make their case. She stressed that this is a meaningful opportunity for Wells recipients to address key issues of fact or law before an enforcement recommendation is officially made. Wells submissions will be reviewed by senior enforcement leadership and the SEC staff. Although Director Ryan cautioned parties and counsel that fairness should not be mistaken for weakness or leniency, and warned against the use of delay tactics to prolong an investigation because the staff has been tasked to move expeditiously, and to reach conclusions and make recommendations within reasonable time periods.
With respect to enforcement, Director Ryan outlined an enforcement approach focused on quality, effectiveness, fairness and impact rather than enforcement numbers. She also echoed Chairman Atkins’ prior statements about pursuing enforcement actions involving egregious fraud that causes substantial harm to retail investors and a more measured approach to non-fraud violations. Additionally, she emphasized a focus on targeting types of fraudulent conduct that undermines market integrity, such as accounting fraud, insider trading, wash trading and market manipulation.
Lastly, Director Ryan provided some insight into the Enforcement Division’s approach to non-fraud rule matters. While she stated that the SEC will take a less stringent approach to non-fraud violations, noting that many of these violations should not result in enforcement cases by the SEC, she firmly stated that there is a middle ground, and the Enforcement Division would focus on regulatory violations that are the result of compliance failures that pose extensive risks to investors, risks to the integrity of the market, or that would result in an unfair benefit to the market participant. To that end, the SEC will continue to bring certain actions involving non-fraud rule violations, including public company reporting, obligations to maintaining adequate books and records and adequate internal accounting control requirements, as well as actions to uphold applicable broker-dealer or investment adviser’s obligations to adhere to fiduciary duty and financial responsibility rules.