Government Enforcement, Investigations & Litigation

At the Pennsylvania Association of Criminal Defense Lawyers (PACDL) White Collar Practice Seminar earlier this month, partner Jan Folena, co-chair of Stradley Ronon’s securities and regulatory enforcement practice, shared her insights during a session on U.S. Securities and Exchange Commission (SEC) enforcement.

Jan discussed the current enforcement landscape for the recently installed SEC management, how the commission’s priorities have evolved, and what to expect as the SEC’s focus shifts under the second Trump administration.

Below are the top three takeaways from her presentation:

Accurate Disclosures Are Essential

Transparency remains the cornerstone of investor trust. Firms should prioritize clear and precise disclosures, particularly as new products emerge. The SEC’s standard investor protection mandates require rigorous adherence. The SEC’s focus on increased access to private markets and the use of financial technology exemplifies the critical need for accuracy, where misleading disclosures or technology failures can lead to significant enforcement risks.

Regulatory Exams Are Increasingly Central

There has been a shift in how regulatory oversight is conducted. Many functions traditionally handled through enforcement actions are likely to be addressed during routine and targeted exams. Regulators follow a defined checklist during these reviews, making it imperative for firms to maintain proactive compliance programs. Early identification of appropriate legal arguments and corrective measures during exams can prevent costly enforcement proceedings.

Compliance Is an Ongoing Commitment

Enforcement risks do not dissipate quickly; federal statutes of limitations can extend from five to 10 years for securities law violations. Avoid complacency, especially during periods of administrative change or uncertainty. Sustained compliance efforts are necessary to mitigate long-term risks and avoid enforcement actions that may arise years after an issue occurs.

For firms navigating the complexities of securities enforcement today, Jan’s presentation underscored the evolving regulatory environment and the importance of accurate disclosures, examination readiness, and the ability to identify and present legal arguments at every stage of regulatory scrutiny.