Partner Domenico Minerva and Associate Lisa M. Strejlau are the authors of the article, “By the Numbers: Navigating the New SEC Landscape—What Institutional Investors Need to Know,” published in the Summer 2026 edition of NCPERS PERSist. Drawing on key fiscal year 2025 enforcement data, the article examines how declining SEC enforcement activity, evolving enforcement priorities, and increasingly limited shareholder engagement channels are reshaping the landscape for institutional investors. The article explores what these developments mean for investors seeking to fulfill their fiduciary responsibilities, protect portfolio value, and pursue shareholder remedies.
The authors highlight the SEC's substantial decline in activity during fiscal year 2025. Total enforcement actions declined 22%, while standalone enforcement actions fell 30% compared to fiscal year 2024. Although the SEC reported $17.9 billion in monetary relief, that figure was largely driven by a single $14.9 billion judgment tied to a long-running Ponzi scheme. Excluding that outlier, recoveries were closer to $2.7 billion, and the SEC distributed just $262 million to harmed investors—the lowest amount in five years. The article also highlights a sharp decline in whistleblower awards, noting that despite a record number of tips, complaints, and referrals, the SEC awarded only $60 million to whistleblowers in fiscal year 2025, “potentially affecting the pipeline of fraud investigations that uncover significant investor harm.”
The article further examines how the SEC's evolving enforcement priorities and increasingly constrained shareholder engagement channels are reshaping the landscape for institutional investors. As the authors explain, recent SEC guidance has expanded the grounds for excluding shareholder proposals and reduced SEC involvement in no-action request disputes, “making traditional governance channels more challenging.” The 2025 data reflects this trend, with fewer shareholder proposals submitted or reaching a vote and more proposals excluded. As a result, “litigation is increasingly the primary accountability mechanism when engagement fails.”
As SEC enforcement wanes, the authors explain that private securities litigation has become “the principal avenue for recovering losses and addressing corporate misconduct,” while Delaware courts remain critical to shareholder protection by reinforcing investors' ability to enforce merger agreements, obtain books and records, and pursue fiduciary duty claims for information, accountability, and governance reforms. The article also examines how private litigation continues to evolve to address emerging risks, including artificial intelligence disclosures, “AI-washing,” and other technology-related misrepresentations.
The authors also examine the SEC's evolving enforcement priorities, which SEC leadership has described as a deliberate shift away from “regulation by enforcement” toward a narrower focus on fraud, market manipulation, and cases involving clear investor harm. One exception is individual accountability. Approximately two-thirds of standalone enforcement actions involved charges against individuals. As the authors observe, “When the agency acts, executives increasingly face personal consequences.”
The authors conclude that today's environment requires a more proactive approach to risk management and recovery: “The message is clear: investors cannot rely solely on the SEC for loss recovery or corporate deterrence. Proactive engagement with private litigation channels is now essential.” They close by outlining strategic considerations for institutional investors, including acting quickly when losses emerge to preserve rights in both securities and Delaware actions, monitoring emerging risks, and using litigation strategically to pursue governance reforms and hold boards and executives accountable.