SEC Division of Examinations Issues Exam Handbook
On October 1, 2026, the SEC’s Division of Examinations published a new SEC Exam Handbook: A Practical Guide on Process and Engagement, replacing the brochure that has long accompanied examination notices. Although the Handbook largely memorializes existing practice, it provides new detail on how examinations are opened, conducted, and closed—and on the circumstances in which examination findings may lead to enforcement scrutiny.
Among other things, the Handbook confirms that examination staff may refer issues to the SEC’s Division of Enforcement, other regulators, or criminal authorities, and in some circumstances may do so before an exit conference or deficiency letter. It also emphasizes that prompt remediation may mitigate whether a finding is referred to Enforcement, while encouraging registrants to address misunderstandings and compliance concerns with examination staff as they arise.
The Handbook does not announce a new enforcement policy, but it puts in writing several features of the examination process that can matter when an exam begins to take on an enforcement dimension. For registrants, the publication offers a useful roadmap for managing that risk—from responding to information requests and preserving privilege to addressing potential deficiencies before they become referral issues. Click here to read the full post.
FDA and SEC Announce Coordination on Scrutiny of Public Disclosures
The FDA and SEC are stepping up coordination over public disclosures concerning FDA-regulated products. A new memorandum of understanding (MOU) provides a framework for the agencies to share information—including nonpublic FDA correspondence, meeting minutes, and complete response letters—for use in SEC filing reviews and enforcement investigations.
The agreement gives the SEC greater ability to compare companies’ public statements about FDA interactions, clinical data, and regulatory milestones against the underlying FDA record. Information sharing can also flow in the other direction, potentially prompting FDA scrutiny based on issues identified by the SEC.
Public companies, particularly in the life sciences sector, should expect increased scrutiny of FDA-related disclosures. Read our latest post for more on the new framework and its enforcement implications.
SEC Proposes to Rescind Investment Adviser Pay-to-Play Rule
On September 3, 2026, the SEC proposed eliminating its investment adviser pay-to-play rule, Rule 206(4)-5, along with the related recordkeeping requirements. If finalized, the proposal would remove a compliance regime that can impose a two-year compensation ban for even relatively minor political contributions and has long presented advisers with complex questions about covered employees, government officials, placement agents, and public pension investments.
But rescission would not mean the end of pay-to-play risk. The SEC emphasizes that improper efforts to influence government investment decisions could still implicate the Advisers Act’s antifraud provisions and fiduciary duties, while state and local pay-to-play and procurement laws, federal bribery statutes, public pension rules, and parallel MSRB and FINRA requirements would remain. The proposal also raises important questions for exempt reporting advisers, foreign private advisers, and firms that have embedded Rule 206(4)-5 requirements into contracts and compliance programs.
Our latest blog post examines the SEC’s rationale for the proposed rescission, what would—and would not—change for advisers, and the practical compliance and enforcement implications if the proposal becomes final. Click here to read the full article.
The Evolving Regulatory Landscape for Private Credit: Key Considerations for Lenders
Private credit has grown rapidly — and enforcement authorities are paying attention. The Department of Justice, including the U.S. Attorney’s Office for the Southern District of New York, has identified the private credit markets as an area of focus, with pending cases involving alleged borrower fraud, multiple pledges of the same collateral, and false financial information. Recent reporting also suggests scrutiny may extend to lenders themselves, including how private credit assets are valued and disclosed.
The enforcement risks extend beyond criminal investigations. SEC examination priorities include valuation practices, fees and expenses, conflicts of interest, and products with limited liquidity, while recent private litigation has challenged portfolio valuations, disclosures concerning credit quality, and adviser compensation. These developments highlight an increasingly important white collar and enforcement issue: the same valuation decisions, disclosures, diligence processes, and contemporaneous governance records can be tested by regulators, prosecutors, and private litigants.
In a new Sidley Global Finance Update, “The Evolving Regulatory Landscape for Private Credit: Key Considerations for Lenders,” our colleagues examine the changing regulatory and enforcement environment and practical steps private credit firms can take to mitigate risk — including strengthening valuation governance, disclosure consistency, data controls, and collateral diligence. Click here to read the full Update.
New SEC Unit Signals Continued Focus on Accounting and Auditing Misconduct
On August 5, the U.S. Securities and Exchange Commission (SEC) announced it is establishing the Financial Reporting and Accounting Unit (Unit) as a new unit within its Division of Enforcement. The Unit will be led by Timothy Zimmerman, who served as Deputy General Counsel of accounting firm RSM US following twelve years in private practice. It will focus on investigations of accounting and financial reporting fraud and general accounting and auditing misconduct. Establishing the Unit institutionalizes a priority area that both Chairman Paul Atkins and Enforcement Director David Woodcock highlighted in their prior public remarks.
Delaware Supreme Court Rejects Jarkesy-Based Jury Trial Challenge to State Administrative Enforcement Proceeding
On July 16, the Delaware Supreme Court held that defendants facing securities fraud and registration claims in administrative proceedings brought by the Delaware Investor Protection Unit are not entitled to a jury trial under the Delaware Constitution, distinguishing the U.S. Supreme Court’s decision in SEC v. Jarkesy. Applying its recently adopted Blue Beach Bungalows framework, the court concluded that the state statutory claims are not sufficiently analogous to common-law actions historically tried before a jury, despite the availability of monetary penalties.
The decision underscores that jury-trial challenges to state administrative enforcement actions will turn on the text and history of each state’s constitution and statutory scheme, rather than Jarkesy alone. With similar challenges pending in other jurisdictions, including Arizona, the ruling provides important guidance for regulators and litigants assessing the continued viability of administrative enforcement proceedings seeking civil penalties. Click here to read the full blog post.
What to Expect in SEC Rulemaking: Takeaways From the SEC’s Spring 2026 Regulatory Agenda
The SEC has released its Spring 2026 regulatory agenda. With nearly 40 action items in the prerule or proposed-rule stages and many proposals scheduled for October 2026, the agenda signals a robust effort focused on reducing compliance burdens, facilitating capital formation, and providing greater regulatory certainty for digital assets.
External Review Recommends Sweeping Changes to FINRA Enforcement Program
On June 30, the Financial Industry Regulatory Authority (FINRA) published an outside expert report setting forth significant recommendations for the management, investigation, review, and resolution of enforcement matters. FINRA commissioned the review in July 2025 as part of its FINRA Forward modernization initiative, retaining Professor Paul Eckert of William & Mary Law School and former SEC Commissioner Troy Paredes to evaluate opportunities for “meaningful, common-sense improvements” to FINRA’s enforcement program.
