Key Observations from Director Margaret Ryan’s First Public Address
Introduction
The SEC Enforcement Division is charting a new course. On February 11, 2026, newly appointed Director Margaret Ryan delivered her first public address since taking the helm in September 2025, speaking to the Los Angeles County Bar Association at its 56th Annual Securities Regulation Seminar. Her remarks offer the clearest signal yet of how the Division will approach enforcement under her leadership—with significant implications for regulated entities and their counsel.
Core Philosophy
Director Ryan, a former senior judge of the United States Court of Appeals for the Armed Forces, emphasized principles of integrity, honor, and responsible exercise of federal authority. While acknowledging certain legitimate criticisms of the prior administration’s enforcement posture, she firmly rejected suggestions that the Commission has abandoned its enforcement mission as factually incorrect.
Enforcement Priorities
Director Ryan articulated three principal categories of enforcement concentration. First, the Division will devote substantial resources to prosecuting traditional fraud that inflicts tangible losses on ordinary investors, including Ponzi schemes and similar deceptions targeting retail participants. Second, the Division will maintain vigilance over conduct that distorts market functioning, including financial statement manipulation, insider trading, wash trading, and price manipulation.
Third, and perhaps most consequentially, Director Ryan addressed regulatory infractions that do not involve fraud. She expressed confidence that numerous technical violations neither require nor warrant enforcement proceedings. Instead, the Division will concentrate on non-fraud matters where: (1) the compliance breakdown creates exposure for investors; (2) the violation jeopardizes market soundness; or (3) the regulated entity derives improper advantage from noncompliance. Where deficiencies can be addressed through education and remediation rather than enforcement, such outcomes would be welcomed.
Procedural Enhancements
Director Ryan announced several enhancements to the Wells process, which provides advance notification of contemplated charges and an opportunity to respond. Potential respondents will now receive a minimum of four weeks to prepare submissions, increased from the two-week timeframe sometimes provided previously. A member of Division senior leadership will be present at every Wells conference, ensuring direct access to decision-makers. Director Ryan emphasized that compelling submissions can influence outcomes at both the staff recommendation and Commission authorization stages.
The Director also indicated that staff transparency regarding the evidentiary record will increase as matters approach the Wells stage. However, she cautioned against conflating procedural fairness with permissiveness, warning against tactics designed to prolong investigations unnecessarily.
What This Means for Regulated Entities
While fraud enforcement remains robust, the Division is signaling greater restraint in pursuing technical regulatory infractions where investor harm or market impact is absent. For entities that identify compliance deficiencies, prompt remediation may prove critical in determining whether enforcement action follows. For parties facing potential proceedings, the enhanced Wells framework presents important advocacy opportunities. Director Ryan also emphasized cooperation, referencing the Seaboard factors (which guide the SEC’s assessment of cooperation credit) and encouraging entities to approach the Division early with timely cooperation and comprehensive remediation.
Director Ryan’s address signals a meaningful recalibration of enforcement priorities. Companies should take this opportunity to assess their compliance posture, identify and remediate any technical deficiencies, and develop protocols for early engagement with the Division if issues arise. We welcome the opportunity to discuss how these developments may affect your compliance program, pending SEC matters, or broader regulatory strategy.
Scale LLP Investigations & White Collar Defense Team
Scale’s Investigations & White Collar Defense team—led by Peter Lallas, Samer Korkor, and Katie Sweeten—brings decades of experience representing companies and individuals in DOJ and SEC investigations and related litigation. With backgrounds as a former SEC Senior Trial Counsel and former DOJ federal prosecutors, the team offers first-hand insight into enforcement priorities, investigative strategy, and effective defense. Serving clients facing inquiries from the DOJ, SEC, IRS, and other federal regulators, the group also conducts independent internal investigations and helps organizations design and strengthen compliance programs to mitigate risk.
