Trump Appointees Take Control, SEC Staff Must Get Approval From Leadership Before Launching Investigations

The SEC has changed its rules on when investigators can launch formal probes, giving the agency’s top commissioners more control. This adjustment, made under President Trump’s new leadership, may reshape how quickly cases move forward.

Key Facts:

  • SEC lawyers now need permission from the highest ranks before issuing subpoenas.
  • This approach reverses a prior delegation of authority to lower-level staff.
  • New Republican-led leadership took over after the departure of Gary Gensler and Jaime Lizárraga.
  • Acting Chair Mark Uyeda is awaiting confirmation of Paul Atkins, chosen by President Trump.
  • The President pledged to end “weaponization” of federal agencies, including the SEC.

The Rest of The Story:

Under previous administrations, SEC enforcement directors or senior staff could launch formal investigations without requiring approval from the full Commission.

Now, some attorneys have been told to seek sign-off before issuing subpoenas for testimony or documents.

This change may allow the commissioners to shape enforcement at an earlier stage, though informal requests for information remain unaffected.

Former SEC co-director Steven Peikin, who served under Jay Clayton, acknowledged this development might happen.

During an industry panel, he called formal order authority “a huge waste of commission resources,” suggesting more centralized oversight could help the Commission manage its workload.

At the same time, critics worry that requiring commissioner sign-off might delay essential investigations.

Commentary:

Some view this move as a practical step that ensures elected leaders have oversight of an agency with significant power over financial markets.

By requiring commissioners to approve investigations, there is a clear, top-down directive that can reduce the risk of politically motivated enforcement.

Others argue that too many investigations in the past have been driven by political agendas, resulting in unfair targeting of individuals and businesses.

Centralizing this authority in the hands of officials appointed by the President aligns with the push to restore neutrality and limit any misuse of the agency’s power.

The SEC holds sway over America’s financial landscape, and it is only natural that the administration would want to guide its direction.

This oversight may also help ensure the agency focuses on key areas rather than pursuing every case that crosses an attorney’s desk.

The move reflects what many voters expected from the current administration: a rollback of what they see as excessive bureaucracy and a promise to end government overreach.

By reining in the SEC’s autonomy, officials believe they are helping return power to the people through the representatives they elected.

The Bottom Line:

Requiring the SEC’s top commissioners to approve new probes changes the agency’s balance of power.

Whether this ultimately protects businesses or hinders investigations will depend on how actively the new leadership uses its authority.

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