SEC's Enforcement Director Delivers First Public Remarks

On May 13, 2026, newly appointed SEC Division of Enforcement Director David Woodcock delivered his first public remarks at the Managed Funds Association Legal & Compliance 2026 Conference in New York. Mr. Woodcock, who previously served as Director of the SEC's Fort Worth Regional Office from 2011 to 2015, is still settling into his new role and remarked warmly that returning to the Commission "feels very much like returning home."

Leadership Style Aligned with Chairman Atkins: Focus on Fraud

As Director, Mr. Woodcock made clear that he is fully aligned with Chairman Paul Atkins and intends to focus on a "back to basics" approach by providing "hands-on leadership" to support and empower Enforcement staff in a manner that allows them to "focus on the fundamentals" when it comes to enforcing the securities laws.

In a period marked by a steep decline in enforcement actions, Mr. Woodcock also reiterated the Commission's deliberate shift to what it describes as an "emphasis on quality over quantity." What this will look like in actual practice and enforcement results at the end of fiscal year 2026 and beyond remains to be seen. For now, Mr. Woodcock noted, Enforcement will continue to focus on protecting investors and markets from "real harm" and confronting and stopping fraud in all its forms. Later in his remarks, Mr. Woodcock further punctuated this point, stating unequivocally that Enforcement is "not focused on prosecuting firms or individuals for honest mistakes that cause no investor harm."

Though "quality over quantity" may sound promising to many who could find themselves in Enforcement's crosshairs, issuers should not interpret it as a softening of enforcement. Fewer cases likely means the Division will invest more resources per investigation, building stronger evidentiary records before bringing charges, and the cases brought may be more thoroughly developed and potentially harder to defend against. Registrants should not assume that a reduced case count translates to reduced risk. In other words, those who find themselves in a "quality" SEC enforcement matter should expect a well-prepared adversary.

Mr. Woodcock's message amplifies and advances recent statements from other Enforcement leadership, including his predecessor, Judge Margaret Ryan, who on February 11, 2026, emphasized the Division's focus on holding "liars, cheats, and thieves" to account. Mr. Woodcock signaled that this approach will play out across Enforcement's "core focus areas," including offering fraud, accounting and disclosure fraud, insider trading, market manipulation, fraud by foreign actors and fiduciary breaches involving misuse of client assets. Indeed, throughout his remarks, Mr. Woodcock described several recent enforcement actions involving insider trading, financial reporting and private funds, all with a clear and distinct throughline: Enforcement resources, strained though they are following significant staff attrition, are fully dedicated to chasing true fraud that harms investors and undermines market integrity.

Public Focus on Private Credit

Mr. Woodcock also made clear a need to "specifically mention private credit," a topic receiving increasing Commission attention. On this point, Mr. Woodcock reminded that "it was prior banking regulatory decisions that constricted financing for small and growing businesses, which created the opening – and need – for private credit to expand rapidly. There are stresses in some portfolios and developments playing out more broadly across this sector, and we are monitoring the situation." Private credit industry participants may wish to audit their valuation methodologies, fee disclosures and conflict-of-interest policies now, particularly for illiquid or hard-to-value assets. Mr. Woodcock's reference to monitoring "stresses in certain portfolios" hints that the Division may already be tracking specific funds or strategies where markdowns or liquidity issues could reveal prior valuation problems.

Institutional Priorities: Retail Fraud, Interagency and Cross-Border Enforcement

Mr. Woodcock also highlighted and announced several institutional priorities:

• Retail Fraud Working Group. Enforcement is reinstituting the Retail Fraud Working Group to focus on retail investor protection and improved interagency coordination at the state and federal level.
• Improved Interagency Cooperation. Enforcement intends to return to what Mr. Woodcock described as "a more collaborative and productive posture" with other regulatory and law enforcement agencies that will include "formalizing information-sharing protocols." This is particularly well underway with the Commodity Futures Trading Commission (CFTC) as part of the agency's "harmonization efforts."
• Cross-Border Task Force Activity. The Task Force formed last September is actively investigating potential violations involving foreign-based companies – potential pump-and-dump schemes and gatekeeping failures by underwriters and auditors facilitating access to U.S. markets. Increased interagency coordination means companies and their counsel should think dynamically about exposure from the outset of any investigation. A matter that begins as an SEC inquiry could simultaneously or subsequently involve the U.S. Department of Justice, CFTC, Financial Crimes Enforcement Network or other federal or state regulators. Early assessment of potential parallel proceedings is paramount to ensure that any representations, submissions or cooperation with one agency is consistent and strategically sound across all potential forums, including where an individual's Fifth Amendment rights are at issue.

A Message for Companies and Their Counsel

Perhaps most noteworthy were the new Director's closing comments on engagement with Enforcement staff:

• We All Make Mistakes. As noted above, Mr. Woodcock took care to draw a clear line between what he described as "honest mistakes" and actual fraud, promising that the Commission "is not focused" in prosecuting the former in the absence of investor harm. However, he hedged that commitment by noting that the Commission will consider "the difference between error and fraud" and "calibrate remedies" accordingly. Just what that will mean in actual practice remains to be seen as aging and even new investigations into clearly non-fraudulent conduct and based on strict liability provisions of the securities laws remain ongoing (e.g., alleged failures to register, timely form-filing compliance lapses, books and records matters).
• Be Honest with Us. Woodcock reiterated the importance that Enforcement and the Commission itself place on self-reporting, cooperation and remediation – long-standing priorities rooted in the Seaboard Factors and a prominent and recurring theme of prior administrations. Going a step further, Mr. Woodcock addressed the importance of ensuring the staff fully understand a company's business model and course-correcting misunderstandings to promote not only efficiency, but perhaps better outcomes for parties finding themselves under investigation. It is not entirely clear how, or if, this would result in new or improved forms of cooperation credit or assurance that self-reporting and openly engaging with staff will result in a declination to pursue an enforcement action.
• Let's Talk It Out. Woodcock encouraged companies and their counsel to be proactive not only in self-reporting, cooperating and remediating, but also in ensuring staff fully understand a company's business model and clarifying and course-correcting misunderstandings along the way. As Mr. Woodcock stated: "The takeaway is simple: engage early, engage seriously, and engage candidly … If we misunderstand your business model, use that opportunity to clarify." In other words, companies that self-report, cooperate fully and remediate will be treated differently from those that conceal or obstruct. However, in practice, this can prove tricky, especially in light of tension, at times, between the staff's understanding of the facts and belief in the strength of proposed charges versus the implementation of the Commission's policies and priorities. It is not surprising that Mr. Woodcock also cautioned counsel to "respect the Division chain of command and [do] not assume that you as counsel have a perfect understanding of the Commission's priorities and what cases will or will not ultimately be brought." Those remarks, it seems, provide a little insight into Enforcement's reaction to a recent spate (or perhaps a bum's rush) of white-letter campaigns circumventing investigating staff in order to "speak to the manager" during the course of an investigation in an effort to seek to secure a better outcome.
• Targeted, Principled, Evidenced-Based Enforcement. Woodcock closed by expressing his hope that his tenure will be defined by a return to what he believes Enforcement was intended to be: "a targeted, principled, evidence-based response to conduct that harms real investors." The emphasis on actual "investor harm" gives respondents powerful framing language for Wells submissions, settlement negotiations and litigation. Where a client's conduct did not result in demonstrable investor losses, or where the theory of harm is attenuated or speculative, defense counsel should seek to hold the Division to its stated standard. Mr. Woodcock's own words could be cited back to the staff as a benchmark: If the case doesn't involve real harm to real investors, it may not fit the Division's own articulated priorities.

Things Left Unsaid

Mr. Woodcock provided helpful insights to his own priorities and what practitioners and market participants should continue to expect from a realigned Division of Enforcement. However, beyond his comments that the Commission will tailor remedies to account for the vast difference between mistakes and fraud, Mr. Woodcock made no mention of some recently announced policy changes (or potential changes), including the SEC's proposal to rescind its long-standing "no deny" language from settlements, the newly refined Wells process or the newly formed SOX Group. And though in keeping with standard policy not to discuss pending cases, Mr. Woodcock also did not address the impact of the U.S. Supreme Court's forthcoming decision addressing the agency's right to obtain disgorgement in the absence of investor pecuniary harm – SEC v. Sripetch. Rest assured, dear readers, we at the blog discussed the case previously and are monitoring it.

The SECond Opinions blog will continue to monitor developments on this topic and provide updates. If you have questions about these developments, please reach out to the authors or another member of Holland & Knight's Securities Enforcement Defense team.