The Securities and Exchange Commission (SEC) is abandoning the hard-line enforcement approach that defined the Biden years, with new Chairman Paul Atkins promising to warn businesses about technical violations before launching major actions against them.
Atkins told the Financial Times that the agency will focus on serious fraudsters while giving companies more notice about potential problems. The shift represents a complete reversal from his predecessor Gary Gensler, who built a reputation for aggressive enforcement and hefty fines across Wall Street.
“If you lie, cheat or steal your investors and steal their money like Bernie Madoff, we’ll leave you naked, homeless and without wheels,” Atkins said, quoting a sign from his former boss’s office. But for technical violations, he added, “You can’t just suddenly come and bash down their door.”
Billions in Fines Face Fresh Scrutiny
The new approach puts billions of dollars in penalties under question. Gensler’s SEC collected massive fines from banks and brokers for record-keeping violations, which Atkins now calls inappropriate for industry-wide problems.
Atkins criticized the formulaic nature of those penalties, saying they “devolved to where it became a formula: what’s your revenue, here’s your invoice.” Instead, he wants regulators to act more like teachers warning students to get their act together.
The chairman specifically targeted Gensler’s enforcement-heavy approach, saying it lacked predictability and due process. “It would shoot first and then ask questions later,” he said, echoing Republican criticisms of the previous administration.
Crypto Rules Get Major Overhaul
Atkins is moving quickly to fulfill Trump’s promise to make America “the crypto capital of the world.” The SEC has already dropped several cryptocurrency cases since January, many involving platforms that donated to Trump’s inauguration fund.
Unlike Gensler, who viewed most digital tokens as securities requiring strict oversight, Atkins believes most tokens fall outside securities law. He wants to create rules allowing 24/7 trading of tokenized stocks and bonds through blockchain technology.
The chairman pointed to the FTX collapse as proof that proper regulation works. While the exchange’s offshore operations failed spectacularly, its regulated U.S. arm protected customer funds and returned money to investors.
“We want people not to be doing this offshore,” Atkins said, warning that companies already offering tokenized U.S. stocks should be “very careful” as new rules develop.
Wall Street Welcomes Softer Touch
The regulatory shift comes as Trump appointees across government roll back Biden-era rules they viewed as business-hostile. Republican regulators are embracing deregulation while pulling back from enforcement programs that targeted corporate misconduct.
Atkins said he’s addressing “market perception” that the SEC under Gensler lacked due process and rule of law. The agency is also working to standardize record-keeping requirements across different types of financial firms, which currently face varying rules.
The changes signal a return to the more business-friendly approach that characterized Republican-led agencies before Biden’s presidency. Wall Street firms have long complained about what they saw as excessive enforcement and unpredictable rule-making under the previous administration.