On November 10, 2026, the Securities and Exchange Commission (SEC) announced the Division of Enforcement’s results for fiscal year (FY) 2026, which ended September 30, 2026.¹ The headline numbers continue the sharp decline that began in FY 2025: the Commission filed 348 enforcement actions and obtained orders for approximately $1.1 billion in monetary relief. Yet the Commission returned roughly $731 million to harmed investors, nearly triple the prior year’s total.  The same evening, Enforcement Director David Woodcock delivered a speech at the 26th Annual A.A. Sommer Lecture at Fordham Law School, where he discussed the results and laid out his vision for the Division going forward.²

Both the release and the Director’s remarks make clear that the current leadership does not view case counts and dollar figures as the measure of success.  At the same time, the release provides a roadmap for everyone – including the Division of Enforcement staff – of what the Commission and Director expect from Enforcement going forward: a more active and assertive Division that focuses on cases involving fraud and significant investor harm but not to the exclusion of non-fraud cases that reinforce investor protection guardrails.

This alert summarizes the FY 2026 results and compares them to the FY 2024 and FY 2025 results; explains their significance for both regulated entities and the SEC staff; discusses how the SEC’s use of artificial intelligence (AI), which the federal government now refers to as “super intelligence” (SI), is likely to make Enforcement faster and more targeted; and offers practical takeaways for public companies and other registrants.

FY 2026 Results at a Glance

** FY 2025 figures as adjusted by the SEC to exclude “deemed satisfied” amounts and the judgments in the long-running Stanford Ponzi scheme litigation.

Several features of the results are notable. First, the decline is part of a sustained multi-year trend: FY 2024 was itself 26% below FY 2023,³ FY 2025 reflected a pre-inauguration “unprecedented rush” followed by a pivot to slower-developing fraud matters,⁴ and FY 2026 standalone actions are down roughly 45% from FY 2024. Director Woodcock attributed declines over the past year partly to the government shutdown and internal transitions.⁵

Second, prior-year monetary totals were driven by outliers (a single judgment accounted for about 56% of FY 2024’s total,⁶ and FY 2025 fell to about $2.7 billion as adjusted⁷), but even on an adjusted basis FY 2026 remedies are well below prior years, reflecting the retreat from large corporate penalties for non-fraud violations such as the off-channel communications sweeps the current Commission has criticized.⁸

Third, distributions to harmed investors nearly tripled, consistent with Director Woodcock’s emphasis on whether money actually reaches victims.⁹

Fourth, the focus has shifted from FY 2024’s initiatives on off-channel communications, the Marketing Rule, whistleblower protection, and beneficial ownership reporting to retail and cross-border fraud, insider trading and market manipulation, financial reporting fraud, and investment adviser misconduct.

Director Woodcock’s Sommer Lecture Remarks: “Activity and Effectiveness Are Not the Same”

Director Woodcock’s remarks at the Sommer Lecture provide important context for understanding the numbers.  He told the audience that case counts are relevant but cannot reveal whether fraud was stopped early, whether voluntary remediation resolved an issue without a case, or whether enforcement is deterring misconduct, noting that “activity and effectiveness are not the same.”¹⁰ He stated that Chairman Atkins has given the Division “room to focus on strengthening the program rather than maximizing any single year’s totals,” a philosophical shift he hopes will endure.¹¹

Importantly, Director Woodcock explained that the Division has “put the necessary pieces in place for stronger and more effective enforcement.”¹² In particular, the Director identified five “pieces” of the program:

• Purpose. Enforcement is prioritizing misconduct that harms investors or degrades market integrity, including violations of investor-protection safeguards before losses pile up.  He reiterated that enforcement “should not substitute for transparent rulemaking.”
• Capability. New leadership training for supervisors and closer management of investigative milestones, supported by the new Financial Reporting and Accounting Unit (FRAU), Retail Fraud Working Group (RFWG), and a reorganized Trial Unit.
• Modernization. The creation of the new Office of Super Intelligence and Analytics, discussed below.
• Coordination. The Cross-Border Task Force and closer work with criminal authorities and fellow regulators, including new memoranda of understanding with the CFTC and FDA.¹³
• Execution. Reinforcing fairness through the updated Enforcement Manual, a more robust Wells process, and serious consideration of credit for self-reporting, cooperation, and remediation.

The FY 2026 release reflects the same themes, highlighting the first significant update to the Enforcement Manual since 2017 (standardizing the Wells process and explaining the cooperation framework) and the Commission’s rescission of Rule 202.5(e), the so-called “no-admit, no-deny” policy.¹⁴

What This Means Going Forward

While the FY 2026 results and Director Woodcock’s statements provide meaningful insights for companies and individuals in the outside world, they also send a clear message to the SEC staff that this Commission, and this Director, want to do more, and more effectively. His statements suggest that the past year’s performance is a base, and not the new normal.

The FY 2026 release and the Director’s remarks put the staff on notice of the administration’s priorities and encourage the staff to open up cases that fit within the framework that Commission leadership has set forth. Director Woodcock named the priorities as “fraud in all its forms, market manipulation, insider trading, financial reporting misconduct, and abuses of investor trust,” with particular emphasis on retail investors and on charging the individuals responsible.¹⁵ However, the FY 2026 results also highlight the actions brought to enforce investor-protection guardrails, including the Custody Rule, Regulation Best Interest, privacy and identity protection, Suspicious Activity Reports (SARs) and Bank Secrecy Act obligations, and blue sheet compliance. That emphasis signals that the staff will likely continue to open investigations into what some may call “technical” violations, even where no fraud is alleged.

How Artificial Intelligence May Make SEC Enforcement More Efficient

Following a recent Executive Order, federal agencies including the SEC now use the term “super intelligence” or “SI” in place of “artificial intelligence” or “AI.”¹⁶ No matter what it is called, the FY 2026 release and Director Woodcock’s statements make clear that the technology has moved from being primarily a subject of enforcement (e.g., “AI-washing” cases) to a core tool of enforcement.

The Division’s New Infrastructure

The Division launched the Office of Super Intelligence and Analytics to bring advanced analytics directly into investigative workflows and “force-multiply” resources. According to the SEC, the office’s work includes AI-enabled anomaly detection, accelerated document and transcript review, and improved blockchain and financial-flow analysis.¹⁷

Director Woodcock explained that the office is designed to identify patterns, review large volumes of documents, and trace financial flows, but stressed that the point is not to replace careful human judgment but rather to give staff better information sooner.¹⁸ The RFWG likewise employs AI and data from multiple regulatory and law enforcement sources to generate investigative leads, and the SEC reports that more than a dozen new investigations have already resulted.¹⁹ These efforts build on the agency-wide SI Task Force created in August 2025 and the designation of a Chief SI Officer.²⁰

Where Efficiency Gains Are Likely

• Detection and analysis. The SEC has used data analytics for years, including the ARTEMIS system to cross-reference trading data against corporate events in insider trading investigations, and risk-based tools to identify potential earnings management.  AI tools can extend the SEC’s existing data analytics capabilities to the SEC’s large volume of tips, complaints, and referrals.  FINRA, which refers matters to the SEC, already uses AI-driven algorithms to review the hundreds of billions of market events generated daily for fraud and manipulation.²¹
• Document and evidence review. Investigations often involve large volumes of unstructured materials, like e-mails, chats, call transcripts, and internal reports.  Generative tools are well suited to identifying themes and nuances in such data that traditional text analytics miss, which could compress the time between a document production and the staff’s development of a theory of the case or issuance of additional requests.
• Preparing document requests and subpoenas. AI may enable the staff to prepare and issue document requests and subpoenas to firms more efficiently.  By drawing on analytics from tips, trading data, and earlier productions, the staff may be able to tailor requests to specific custodians, date ranges, accounts, or transactions rather than relying on broad, categorical demands.  Alternatively, the staff may request large volumes of materials and rely on AI to identify relevant information.  AI-assisted review of initial productions may also let the staff identify gaps and issue follow-up requests more quickly.  As a result, recipients should expect requests that are more targeted or, in some cases, broader in volume, and potentially more frequent, and should be prepared to identify and collect responsive materials on shorter timelines.
• Financial-flow and cross-border tracing.  Blockchain and financial-flow analytics may help the Division follow funds in Ponzi schemes and offshore investment confidence scams.  These are areas where FY 2026 activity was concentrated and where speed matters for asset freezes and investor recovery.
• Accounting and disclosure analytics. Paired with FRAU’s specialized staff, AI tools may help the Division identify reporting anomalies earlier in the reporting cycle, which the SEC says FRAU is already doing.²²

Limits and Implications

For market participants, the practical effect of the SEC’s use of AI is that anomalies are more likely to be detected, and investigations may move faster.  Director Woodcock has separately emphasized the need for timely compliance with subpoenas,²³ which, together with AI-enabled review, suggests shorter windows to assess exposure, decide whether to self-report, and respond to staff requests.

AI usage by registrants also remains an enforcement focus. The Division has signaled scrutiny of overstated AI disclosures by public companies,²⁴ and the Division of Examinations’ FY 2027 priorities likewise focus on registrants’ use of AI and preparedness for AI-enabled cyberattacks.

Practical Considerations

• Do not read lower numbers as lower risk. Director Woodcock has now been in his role for just over six months.  As he has said, he believes the Division has “put the necessary pieces in place” for an effective enforcement program.  He has made important organizational and personnel changes, and he has his key leadership in place.  Firms and issuers should expect vigorous investigations, particularly in fraud, retail investor harm, and individual accountability matters.
• Assume earlier detection. Trading anomalies, financial-reporting irregularities, and suspicious fund flows are more likely to be identified quickly, and firms and issuers should calibrate their own surveillance and controls accordingly.
• Decide early on self-reporting. FY 2026 resolutions reflect meaningful credit for self-reporting, cooperation, and remediation.
• Be ready to move quickly. Expect firm timelines for document productions and testimony, and prepare for compressed review periods as the staff uses AI tools.
• Keep up with key rules. Despite lower filing numbers and the “back to basics” message, the Commission continues to bring Custody Rule, Reg BI, Reg S-P/S-ID, SAR, blue sheet, and whistleblower-protection (Rule 21F-17) cases.
• Review AI disclosures and governance. Public companies, advisers, and broker-dealers should ensure that statements about AI capabilities and use are accurate, substantiated, and consistent with actual practice.
• Use the Wells process. The updated Enforcement Manual offers a more standardized and transparent Wells process, which provides a meaningful opportunity to test the staff’s theories.