The United States Securities and Exchange Commission – divided along political lines– sent to the trash heap a 15-year-old policy allowing its Director of Enforcement to approve new investigations as well as the issuance of subpoenas. See Delegation of Authority to Director of the Division of Enforcement, 17 CFR Part 200; Release Nos. 33-11366; 34-102552; IA-6862; IC-35492 (March 10, 2025); and https://www.sec.gov/files/rules/final/2025/33-11366.pdf. This new “interpretation” makes any new investigation to be decided solely at the whim of the Commission’s Republican majority.

This shift will make it less likely for new investigations to begin without the approval of the full Commission. Further, the Commission majority made it clear they were doing this “to more closely align the commission’s use of its investigative resources with commission priorities.” Id. Such a change in policy no doubt will lead to a decrease in investigations being conducted by the Commission’s Enforcement Staff.

In short, this change does not mean there will be no investigations or enforcement actions brought by the Commission, only fewer and with a focus more in tune with its Republican majority. Of course, we strongly recommend reaching out to experienced securities counsel here at Thompson Hine to discuss these matters.