Vice Presidents John Drum and Evan Carter Share Insights on SEC Examination and Enforcement Priorities

November 4, 2026

Following the Colorado Bar Association program “Inside the SEC: Examination and Enforcement Priorities for 2026,” Analysis Group Vice Presidents John Drum and Evan Carter share what they learned from US Securities and Exchange Commission (SEC) leaders about the Commission’s current enforcement and examination priorities.

While noting that the program speakers’ comments should not be viewed as formal Commission guidance, Mr. Drum and Ms. Carter identify four themes that illustrate the SEC’s current focus:

Greater national coordination and centralized expertise

Speakers described a “hub-and-spoke” organizational model at the SEC, supporting topic-specific reporting lines intended to promote greater consistency across offices and examination programs. The recently established Financial Reporting and Accounting Unit is one example of the SEC’s effort to centralize specialized expertise, in that instance, expertise involving financial reporting, accounting, and auditing matters.

For defense counsel, the practical implication is that matters led by regional offices may increasingly be informed by a more standardized agency position and national Commission staff with subject-matter expertise. Regional practice and relationships will remain important, but there may be less variation in how particular technical issues are evaluated.

Artificial intelligence is both a tool and an area of scrutiny

SEC staff characterized AI as a “force multiplier” that can increase the speed, scale, and sophistication of the SEC’s examination and enforcement work.

At the same time, “AI washing,” including unsupported descriptions of AI integration or capabilities and claims that an AI-driven strategy can produce guaranteed returns, remains an area of concern for the SEC’s enforcement agenda. The SEC’s published examination priorities similarly emphasize that the Commission will assess whether AI-related representations are fair and accurate and whether a firm’s operations and controls are consistent with its disclosures.

Defense counsel should therefore expect staff to compare AI-related representations – including those in offering documents, regulatory filings, websites, pitch materials, and investor communications – to the technology’s actual functionality. Differences between marketing representations and operational reality may create examination or enforcement risk.

The examination-to-enforcement referral threshold remains meaningful

The speakers indicated that the SEC does not intend to turn every deficiency or honest mistake into an enforcement matter. They described the referral threshold as relatively high and emphasized that a registrant’s response to an identified issue can impact the likelihood of referral. Specifically, whether a registrant demonstrates that the issue has been understood, appropriately addressed, and credibly remediated may influence whether the SEC pursues further enforcement action. For defense counsel, this reinforces the value of developing a timely remediation strategy and narrative response describing corrective actions.

Protecting vulnerable investors remains a core priority

In describing current areas of focus, the SEC speakers emphasized conduct involving affinity fraud, Ponzi schemes, impersonation schemes, and fraud involving private placements—particularly those involving retirement assets. The SEC has also recently established a Retail Fraud Working Group to coordinate resources and identify cases involving misconduct directed at everyday investors.

This discussion, along with the SEC’s 2026 published examination priorities, suggests that matters involving older investors, retirement savings, self-directed accounts, and the exploitation of trusted relationships are likely to receive close attention.

Overall takeaway

The presentation suggested an SEC that is seeking greater consistency in enforcement practices across its regional offices and using technology to enhance its enforcement agenda, while retaining discretion to distinguish fraud or reckless conduct from good-faith mistakes. In active matters, the takeaways for practitioners remain familiar: establish the facts quickly, preserve relevant evidence, scrutinize disclosures and marketing claims, and consider remediation early in the investigative process.