Big changes are shaking up the SEC since President Trump’s return to the White House. From staffing cuts at the Division of Enforcement to a friendlier stance on crypto, the administration is swiftly reshaping the agency’s priorities. In one of the most significant shifts, the SEC has officially ended a 15-year-old policy that allowed its Director of Enforcement to unilaterally issue subpoenas—marking a major rollback in the agency’s investigative power.
This delegated authority was originally granted in 2009 as part of a broader overhaul following the SEC’s high-profile failure to stop Bernie Madoff’s Ponzi scheme. The goal was to make enforcement more agile, allowing SEC staff to serve subpoenas without waiting for full Commission approval.
But that era is now over. In a final rule adopted on March 10, set to take effect in mid-April, the SEC revoked the enforcement director’s ability to issue formal orders of investigation. Moving forward, every such order will require approval from a majority of the SEC’s five commissioners—introducing a new layer of bureaucracy that could slow the pace of investigations.
Investigators will still be able to request voluntary testimony from firms and individuals, but critics argue the change creates a significant roadblock. One legal commentator noted, “This will make it harder for SEC staff to obtain subpoena power, adding bureaucratic hurdles that could drag out investigations.”
The SEC, however, is framing the move as a return to tradition. “The Division of Enforcement operated for 40 years without delegated authority,” an SEC spokesperson explained. “This change ensures the Commission has full oversight into the cases we pursue.”
So, what does this mean in practice? Expect fewer but more targeted formal investigations with a focus on so-called “core” cases, such as fraud and insider trading. But we expect the SEC to pull back from the disclosure-heavy enforcement approach of Chair Gary Gensler—who was often accused of overreaching, particularly on climate-related disclosures.
Whether the changes will lead to a more efficient SEC—or a weaker one—remains to be seen.