Our latest Investor Alert, “By the Numbers: Navigating the New SEC Landscape” discusses how the SEC’s shift toward reduced enforcement and constrained shareholder engagement tools affects institutional investors’ fiduciary duties, risk management, and loss recovery strategies.

Examining fiscal year 2025 data, the authors highlight a sharp decline in SEC enforcement, with total actions down 22% and standalone actions falling 30% since 2024.  The SEC also distributed just $262 million to harmed investors in 2025—the lowest amount in five years—and $60 million to whistleblowers, a stark 76% decline from 2024.  This shift, the Alert notes, marks a critical inflection point for institutional investors: As the SEC steps back, the burden of protecting portfolios and recovering losses is increasingly shifting to investors themselves.  And while “the SEC’s strategic pivot may yield benefits over the long term,” investors should expect “longer investigation timelines and fewer near-term recoveries through regulatory channels.”

Beyond enforcement, the SEC has narrowed traditional shareholder engagement channels.  In November 2025, the Division of Corporation Finance announced it would generally stop responding to most no-action requests regarding shareholder proposals under Rule 14a-8.  This shift has given companies greater latitude to exclude shareholder proposals, while “reducing investors’ ability to influence corporate conduct without resorting to litigation.”  Additional developments, including Staff Legal Bulletin No. 14M and updates to Regulation 13D/G guidance, have further reinforced this trend, underscoring litigation as an increasingly important avenue for accountability.

With SEC enforcement contracting and shareholder engagement channels narrowing, private securities litigation and Delaware fiduciary-duty actions are more important than ever as tools to protect assets and hold corporations accountable.  “The message is clear,” the authors contend, “investors cannot rely solely on the SEC for loss recovery or corporate deterrence.  Proactive engagement with private litigation channels is now essential.”  The Alert also provides a comprehensive set of strategic recommendations to help institutional investors protect their assets and hold corporations accountable in the evolving SEC landscape.

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