The Enforcement Chief Resigned
In March 2025, the SEC’s enforcement division chief resigned after the agency implemented a new policy requiring political appointees to review every enforcement action before it could proceed. The review process was not announced publicly. It was discovered through reporting.
Since the policy took effect, zero enforcement actions have been approved without political appointee sign-off. Every investigation, every fine, every fraud case now passes through a political filter before it can move forward.
This is not regulatory caution. It is regulatory capture.
What Enforcement Used to Look Like
The SEC under previous administrations filed 700 to 800 enforcement actions per year. Penalties ranged from millions to billions. The agency recovered $4.6 billion for harmed investors in fiscal year 2023 alone.
The enforcement division operated with professional independence. Staff attorneys identified violations, built cases, and brought actions based on the law. Political appointees set broad priorities but did not review individual cases.
That independence ended in March 2025.
What It Means
When every enforcement action requires political approval, the cases that threaten political allies never reach the approval stage. They sit. They age. Statutes of limitations expire. Witnesses move on. Evidence becomes stale.
The companies that donated to the right campaigns, hired the right lobbyists, and cultivated the right relationships face no enforcement risk. The companies that did not face the same SEC they always faced. The law applies unevenly based on proximity to power.
Justice Alito made 64 recusals for stock holdings during his career. He did not recuse when his son worked at the Treasury Department while the Court heard a case involving Treasury.
The SEC freeze is one part of a pattern. The border wall went to a contractor whose previous wall nearly collapsed. Allies get pardoned while opponents get investigated. Enforcement agencies are not being reformed. They are being neutralized.
$4.6 Billion in Investor Recovery at Risk
The SEC’s enforcement division historically returns billions to investors who were defrauded. When enforcement freezes, those investors get nothing. The fraud continues. The perpetrators learn that the cost of breaking the law is zero, as long as the right people are in charge.
Read more on the Corruption series and the Alito Treasury conflict.