Sec Speeches Cryptocurrency Remarks at the 26th Annual A.A. Sommer Lecture

Thank you for that kind introduction.

I am pleased to be here at Fordham Law School for the A.A. Sommer Lecture. I want to thank the SEC Historical Society, Morgan Lewis, and everyone who helped organize for making this such an important and lasting event.

It is an honor to participate in a program named for Al Sommer, whose service to the Commission helped shape our modern securities markets. As a former practicing CPA, I’d be remiss not to recognize his commitment to the integrity of the accounting profession and his distinguished service as Chairman of the Public Oversight Board.

Commissioner Sommer understood that strong capital markets depend on investor confidence, that investor confidence depends on market integrity, and that effective enforcement is an indispensable link in that chain. A lot has changed in our capital markets since he served on the Commission, but the principles that Commissioner Sommer promoted endure.

Before I begin, allow me to share the standard disclaimer: I am speaking today in my official capacity as Director of the Division of Enforcement, but the views I express are my own and do not necessarily reflect those of the Commission, the Commissioners, or my colleagues on the staff.

Earlier today, the Commission released its annual enforcement report. I will begin with a brief discussion of what the report reveals about the year behind. But, since you are free to read the report, the metrics included, and our supporting discussion on your own, I will focus my remarks on the path ahead for the Enforcement Division, and why I am confident in our direction.

On the numbers: in fiscal year 2026, the Commission filed 348 enforcement actions, including 235 standalone actions and 113 follow-on proceedings. The SEC obtained orders for approximately $1.1 billion in monetary relief and returned $731 million to harmed investors. The Commission also instituted 13 trading suspensions in response to suspected manipulation involving Asia-based issuers, and sought individual accountability in approximately two-thirds of our standalone actions.

These figures offer those we serve – the investing public – as well as Congress and other stakeholders, a glimpse into our enforcement program and stewardship of public resources. The numbers are important because the enforcement actions underneath them reflect the excellent work of an extraordinary staff.

But activity and effectiveness are not the same. Case counts are relevant, but alone they cannot tell us whether a fraud was stopped before more investors were harmed; whether voluntary remediation addressed an issue before it metastasized and did not result in a case being brought; or whether visible enforcement is successfully deterring misconduct. Even a large judgment does not tell us whether money reached the harmed investors. Those distinctions are of great consequence—and they belong in any intellectually honest and holistic assessment of our effectiveness. In a recent interview, former Enforcement Co-Director Steve Peikin recalled frustration at the amount of time he and Stephanie Avakian spent managing the docket to keep case counts and financial remedies roughly consistent with earlier periods, because those figures are not particularly good measures of effectiveness. Steve, the feeling is mutual.

Case counts declined this past year. Some of that is attributable to the lengthy government shutdown, some of it to a transition in personnel, priorities, and the allocation of investigative resources. That context matters.

But the bigger takeaway I am reiterating today is that Chairman Atkins has given us room to focus on strengthening the program rather than maximizing any single year’s totals—an important opportunity we have seized upon. It is also an opportunity I believe my predecessors would have welcomed. It is a chance to examine all aspects of our program and put the necessary pieces in place for stronger and more effective enforcement. And it is a philosophical shift that I hope will endure well beyond my tenure.

This brings me to my central message: we have all the pieces in place for an enforcement program of the highest caliber. A program that is effective, modern, and exacting. And one that is worthy of the investors we serve.

Specifically, these pieces I’ll touch on this evening are purpose, capability, modernization, coordination, and execution.

First, on purpose. Our purpose is to protect investors, and our priorities are clear—misconduct that harms investors, degrades market integrity, or both. That includes fraud in all its forms, market manipulation, insider trading, financial reporting misconduct, and abuses of investor trust, among other frauds. That also includes violating investor-protection safeguards; we will not wait until investor losses pile up before we take these violations seriously. We are also emphasizing conduct that impacts retail investors and market integrity, and we are promoting deterrence by holding responsible individuals accountable.

Our new Financial Reporting and Accounting Unit brings together lawyers and accountants to investigate complex reporting misconduct. Our Retail Fraud Working Group brings concentrated attention and analytical tools to schemes targeting everyday investors. And our reorganized Trial Unit strengthens our litigation capacity. These initiatives are not simply changes to an organizational chart. Going forward, you should expect to see these changes increase our capability to detect misconduct earlier, develop evidence more effectively, and bring stronger cases we are prepared to prove in court.

Purpose also extends to respecting Enforcement’s proper role. Vigorous enforcement and clear regulatory expectations go hand in hand. Enforcement should not substitute for transparent rulemaking. Markets and investors are better off with clear rules that are enforced fairly and consistently. A healthy enforcement program protects investors without deterring innovation or discouraging market participants from taking prudent risks. The Division recognizes this balance. Going forward, you should expect to see an enforcement program continuing to work in concert with a clear regulatory and rulemaking agenda, while acting decisively to hold bad actors accountable, regardless of their industry.

The second piece of our program is capability, backed by the ability to litigate. Our Enforcement staff are second to none and over the years, as Commissioner Sommer said in 1996, the staff “has never lacked in courage,” and has “done more to raise the moral level of the marketplace than any other institution, public or private, in the United States. With that in mind, we are investing in our leaders in a big way because capable leadership is essential to continuing our highly capable enforcement. As one example of our efforts, we recently launched a leadership training program for our new and experienced supervisors and are working closely with leadership to better identify risks early and complete investigative milestones in a timely and efficient manner. A supervisor who helps a team move a matter forward by resolving a difficult evidentiary issue or making a timely decision not only improves the course of an entire investigation but helps us get to a better result more efficiently.

The third piece in place is modernization. With today’s rapidly changing technology, we must keep pace with the markets and those who seek to exploit them. For this reason, our new Office of Super Intelligence & Analytics is designed to bring advanced analytical tools directly into investigative work: identifying patterns, reviewing large volumes of documents, and tracing financial flows. The Office better positions the Division to meet ever-evolving threats, including SI-enabled fraud and manipulation schemes. Importantly, the point is not to replace careful human judgment. It is to give our staff better information, sooner, so they can exercise that judgment more effectively. Going forward, you should expect to see the Division leveraging these tools to adapt and respond to both longstanding and emerging threats to investors and our markets.

The fourth piece of our program is coordination. Our Cross-Border Task Force, for example, is already coordinating with domestic and foreign authorities to strengthen transnational enforcement, recognizing a modern reality: schemes can cross jurisdictions faster than any one agency can investigate them. We realized early returns from this initiative last year. And moving forward, you should expect to see even more enforcement activity being driven by this effort.

We also strengthened coordination with criminal authorities and fellow regulators, while respecting the distinct responsibilities of each. The objective is complementary action and reinforcement that better protects investors, not competition over who gets a notable statistic.

Not least of all, the fifth piece of our program is disciplined, fair execution. Executing on our mission does not mean imposing arbitrary deadlines or sacrificing rigor. It means recognizing that delay has consequences, both for investors who may remain vulnerable and for people and businesses under investigation.

Fairness certainly belongs in this discussion, too, which is why we updated our Enforcement Manual and made our Wells process more robust. That dialogue—in which we test our theories against the evidence, listen to contrary arguments, and distinguish culpability carefully—is a critical part of effective enforcement. Fairness also means that meaningful self-reporting, cooperation, and remediation receive serious consideration, just as misconduct receives a serious response. Going forward, we will continue to evaluate and improve our processes, and you should expect to see staff moving as fairly as they do urgently.

Taken together, these five pieces define an effective enforcement program that is fulfilling its responsibility to investors and will do so for years to come. And while they are among the most consequential, many other promising pieces are in place, and you will hear more about those in the months to come.

Let me close where I began: with the legacy of Al Sommer. Commissioner Sommer understood that the strength of our securities markets depends on public confidence in their fairness and integrity. That confidence is earned through the consistent application of the law, the willingness to confront serious misconduct, and the integrity of the institutions charged with protecting investors.

Today, the pieces aligned with those principles are in place. And we are putting them to work—case by case, decision by decision—to continue delivering an enforcement program that is worthy of the investors we serve.

And now, Carolyn, I look forward to our conversation.

Thank you.