Washington is rewinding the clock on investor protection. Under chair Paul Atkins, the U.S. Securities and Exchange Commission has rolled back a series of rules, scaled back enforcement and curtailed shareholder rights. Former senior counsel Benjamin Schiffrin, who spent nearly two decades at the agency, believes the regulator is now siding more with Wall Street than with investors.
The shift may be less theatrical than the bulldozers that recently tore into the White House’s East Wing, said Schiffrin, director of securities policy at Better Markets, a Washington-based financial reform group, but it is just as real. “It is far less visible than the demolition of the East Wing, but make no mistake about it: it is no less real and much more consequential,” he told Investment Officer, arguing that the cumulative effect of the SEC’s decisions amounts to a fundamental change in regulatory philosophy.
The SEC, created in 1934 to protect investors, has over the past 13 months dismantled key safeguards, according to Schiffrin, who spent nearly two decades at the agency, most recently as associate general counsel until 2022.
“It is far less visible than the demolition of the East Wing, but make no mistake about it: it is no less real and much more consequential.”
Benjamin Schiffrin, Better Markets
Under Atkins, the SEC has shifted away from its statutory mandate and toward the interests of the financial industry and corporate management. “The SEC has traditionally been considered an independent agency. It now appears to view itself more as an arm of Wall Street and the administration.”
The latest example came last week, when the SEC proposed delaying or eliminating rules adopted just 18 months ago requiring mutual funds and ETFs to report portfolio holdings more quickly. “Reducing reporting burdens and increasing efficiency in disclosure is a top priority,” Atkins said in the announcement.
Criticizing Europe
The gap between American and European securities regulation has widened substantially. Earlier this year, Atkins wrote in the Financial Times that Europe’s Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD) are driven by “political fads or distorted objectives.”
“If Europe wants to promote its capital markets by attracting more listings and investment, it should focus on reducing unnecessary reporting burdens. For our part, I am committed to ensuring that in the US, the SEC prioritises the wellbeing of investors above the wishes of ideologues,” the chair wrote in an op-ed in which he announced that the SEC is fast-tracking President Trump’s proposal to allow companies to report on a semi-annual basis.
The SEC’s mandate, set out in the Securities Exchange Act of 1934, lists investor protection first. Capital formation and market efficiency follow. Schiffrin said the current leadership has inverted that order. “The Commission does not frame its actions as a retreat. But if you examine the substance of its policies, the direction is clear,” he said.
Arbitration push
One of the most consequential changes is the SEC’s reversal on mandatory arbitration. For decades, the agency maintained that shareholders must retain the right to sue in federal court. Under Atkins, it declared that public companies may compel shareholders into private arbitration. “Arbitration is closed, favors repeat corporate participants and limits appeal rights,” said Schiffrin. “Even Jay Clayton, SEC chair during Trump’s first term, declined to take that step.”
In June 2025, the SEC withdrew a proposal requiring investment advisers to disclose ESG practices. It also scrapped rules addressing conflicts in algorithmic advice and dropped two cybersecurity proposals covering advisers, funds, broker-dealers and market infrastructure.
“Disclosure is the bedrock of U.S. securities regulation. The idea that investors benefit from receiving less information is hard to defend. The SEC’s credibility will suffer.”
At a June roundtable, Atkins suggested there is too much disclosure on executive pay. Schiffrin called that “not surprising,” noting CEO pay has risen more than 1,085 percent since 1978, versus 24 percent for ordinary workers. The SEC’s direction, he said, signals “whose interests the Commission is now serving.”
The share of shareholder proposals reaching proxy statements fell to 55 percent in 2025 from 63 percent a year earlier, according to Better Markets. Enforcement actions against public companies dropped to four from 52.
Crypto and private assets: exemption by declaration
Crypto deregulation has been the most visible shift. The SEC dropped proceedings against Coinbase, Binance, Kraken and Ripple. It declared meme coins, stablecoins and staking services outside securities law, reversing positions it had argued in federal court.
The agency also allowed crypto-based ETFs to trade as commodity products, even when the underlying assets had previously been identified in SEC litigation as unregistered securities.
Congress is considering legislation that would allow issuers to raise up to 75 million dollars a year in token offerings from retail investors without audited, or even unaudited, financial statements.
Push to open private markets to retail
The push to open private markets to retail investors follows the same logic, according to Schiffrin. The SEC has permitted ETFs investing in private credit despite internal concerns about liquidity and valuation. Commissioner Hester Peirce has called for expanding the accredited investor definition. A Department of Labor decision removed guidance cautioning pension managers against private equity, opening 401(k) plans to assets with fewer disclosure requirements than public markets.
Private equity and private credit firms have long lobbied for broader retail access. The SEC is facilitating it. The irony, Schiffrin argues, is that it weakens public markets. Over time, expanded private exemptions reduced the incentive to go public. Opening private markets further to retail investors risks accelerating that trend.
“Disclosure is the bedrock of U.S. securities regulation,” Schiffrin said. “The idea that investors benefit from receiving less information is hard to defend. The SEC’s credibility will suffer.”