SEC Engages in “Targeted, Common-Sense” Reorganization

It has been reported that the Securities and Exchange Commission (SEC) recently reduced head count by an estimated 12% due to the Trump administration’s effort to rapidly downsize the federal government. Particularly hard-hit by this action was the SEC’s Division of Enforcement, which, along with the Office of the General Counsel, experienced significant departures.

The SEC also reportedly reorganized, effective April 9, 2025, its 10 regional offices into three primary regions — the West, Northeast and Southeast — with each region reporting to one of three newly created deputy director positions rather than each regional office reporting to one of 10 regional directors. In addition, the Division of Enforcement’s specialized units (such as the asset management unit) will now report to a single deputy director instead of individual chiefs for each unit. The trial unit, however, will maintain its current structure and continue to be managed by its chief litigation counsel.

 Indeed, SEC Chair Paul Atkins told SEC staff at a May 6, 2025, “town hall” meeting that the agency had reduced head count by 15% and said he expects to undertake a “targeted, common-sense” reorganization. Atkins further emphasized that the SEC was returning to its core congressional mandate of “protecting investors; furthering capital formation; and safeguarding fair, orderly and efficient markets.”

In response to questions about whether a smaller SEC will be able to continue to fulfil its mission, Commissioner Hester Peirce recently remarked that although some of the departures are “going to be very hard,” the SEC has a “really deep talent bench.” To that end, a downsized enforcement division arguably will benefit from a flattened management structure with fewer review gates leading to faster investigations. In addition, the “back-to-basics” priorities of the new commission can be accomplished with fewer people as compared to the novel and complex investigations and rulemakings advanced during the Gensler era. The streamlined structure will also allow the director of enforcement to more efficiently manage what investigations are opened and closed, thereby conserving resources that otherwise might have been spent on wayward investigations that yielded no charges. Finally, the new structure will allow the SEC to have better visibility into investigations as they develop, as well as manage the focus of investigations to ensure that they align with the commission’s priorities. Nonetheless, the SEC has a very broad mandate, and it remains to be seen how the SEC adjusts to its new constrained reality.

For additional SEC reorganization developments, see our previous articles on the recent shift in SEC leadership and the immediate, practical consequences of SEC-related executive orders.