Enforcement of financial crimes is dropping under Trump Adminstration

 Earlier this week, Bloomberg broke the news that the Commodities Futures Trading Commission, which helps regulate the securities market, was told to stop investigating an eye-popping case of potential insider trading, reported Mother Jones. The direction came from a top adviser to the agency’s Trump-appointed chairman, who ordered investigators to retract a referral to the agency’s lawyers surrounding suspiciously timed and lucrative oil trades that were executed minutes before the president sent social media posts rescinding threats to attack Iranian power plants.

This sidelined CFTC investigation is just the latest in a growing pattern: Enforcement of financial crimes is dropping in Donald Trump’s second term, unraveling offices and reforms that will be difficult to rebuild. It also is laying the groundwork for more corporate fraud, or even a broader financial crisis, in the long term, experts say.

This trend has affected each federal agency that handles financial crimes—including the Securities and Exchange Commission, which oversees Wall Street, the Justice Department, and the White House itself. Just a few months after Trump’s reelection, the SEC dismissed a case against crypto exchange Coinbase, then halted a prosecution against a Chinese crypto entrepreneur who bought millions in tokens from a Trump family crypto venture. Several months later, the White House pardoned crypto giant Binance and its ex-CEO.

In May, a private-sector analysis found that the SEC had initiated just five enforcement cases against companies in half a year—the lowest number in the first half of a fiscal year in at least 16 years.

This spring, Sens. Jack Reed (D-R.I.) and Elizabeth Warren (D-Mass.) sent letters to the SEC expressing concern: The director of the enforcement division that brings cases against companies quit after just six months on the job, reportedly over disagreements with the agency about acting against entities that back Donald Trump. Staffing at the corporate watchdog had also fallen by 17 percent, with much of that coming from the enforcement arm. In April, the SEC quietly released data showing that in fiscal year 2025, the agency had brought nearly 30 percent fewer new enforcement actions than the prior year. In May, a private-sector analysis found that the SEC had initiated just five enforcement cases against companies in half a year—the lowest number in the first half of a fiscal year in at least 16 years.

Some drop in enforcement activity when a new president takes office is normal, says Eugene Soltes, a professor at Harvard Business School who studies white-collar crime and corporate compliance. That’s true regardless of party affiliation, because each new administration shifts its priorities and enforcement staff in the initial months after inauguration. But the current waning enforcement of white-collar crime, he says, goes beyond the typical dip that comes with a new presidency.

“I think it’s been clear that the current administration has been very vocal about having a lighter footprint and lighter-touch approach to disciplining companies,” Soltes says. “This seems to be a direct output of policy shifts.”

To read more CLICK HERE