Key Takeaways

  • According to two separate reports released by economic and financial consulting firm Cornerstone Research, the number of accounting and auditing enforcement actions initiated by the U.S. Securities and Exchange Commission (SEC) in 2025accounting and auditing enforcement actionsfell from 31 in 2024 to 10, a decline of 68%. Meanwhile,the Public Company Accounting Oversight Board (PCAOB)saw its finalized enforcement actions drop from 51 in 2024 to 37, a year-over-year decrease of 27%.
  • Additionally, the SEC's total monetary settlements in 2025 plummeted from $907 million in 2024 to $31 million, with 98% of the fines levied in the final weeks of then-Chair Gary Gensler's tenure. Monetary penalties imposed by the PCAOB fell 50% year-over-year to $17.6 million.
  • Although enforcement actions have historically declined during administrative transitions (as seen last year), the SEC's accounting andaudit actions hit a nine-year lowand were "significantly below the levels seen at the start of the previous two SEC chairs' terms," said Jean-Philippe Poissant, co-author of the Cornerstone reports and co-leader of the accounting practice, in a press release.

Deep Dive

The reports come as many financial leaders closely watch the new leadership at the SEC and the audit watchdog it oversees to assess the strictness and priorities of enforcement policies.

Margaret Ryan, head of the SEC's enforcement division and a former Marine and judge, acknowledged in a speech last month to the Los Angeles County Bar Association that the division needs some"course correction"but remains focused on its mission of protecting investors and enforcing federal securities laws, "following the Chair's back-to-basics approach."

"In other words, reports that SEC enforcement has been shelved are not only greatly exaggerated, but completely wrong," she said in a February 11 speech posted on the SEC's website. "But I will say that I care more about the quality and impact of the enforcement actions we bring than about chasing numbers."

BeforeSEC Chair Paul Atkins was sworn in last April, many anticipated that President Trump's nomination and the departure of predecessor Gary Gensler would usher in a new era ofmore targeted enforcement and more collaborative rulemaking. In January, Demetrios Logothetis, a retired partner at Big Four accounting firm Ernst & Young, was appointed PCAOB chair,succeeding Erica Williams. The PCAOB was established by Congress in 2002 following the multibillion-dollar accounting scandals at Enron and WorldCom.

The first full year under a new chair typically sees an enforcement rebound. Poissant and his co-author Russell Molter said they will continue to watch whether that occurs this year, despiteSEC staffing cuts。

. "Clearly, based on Director Ryan's speech... they see the SEC's core mission as getting back to basics, which includes accounting fraud," Poissant said in an interview. "Staffing levels are lower, but I don't think that will hinder a rebound."

One of the SEC's most notable actions so far this year was a January lawsuit against Vikram Luthar, former chief financial officer of Archer-Daniels-Midland, alleging he materially overstated the performance of the company's key nutrition business segment during fiscal years 2021 and 2022 when it failed to meet operating profit targets. The same day, the SEC announced that Chicago-basedADM agreed to paya $40 million civil penalty to settle charges that the company and two other former executives overstated business performance.

An SEC spokesperson declined to comment on the reports.