SEC enforcement actions fell 57% in fiscal 2026, Brattle Group estimated
Extreme Networks has agreed to pay roughly $2.5 million to U.S. authorities to settle sanctions violations over sales of computer equipment and services to MMZ Avangard, the Russian company that produces missiles for Russia’s S-300 and S-400 antiaircraft systems. The settlements with the Justice Department and the Treasury Department’s Office of Foreign Assets Control were announced Tuesday. Extreme Networks is a Nasdaq-listed provider of artificial intelligence and cloud networking.
The sanctions settlement comes as enforcement activity at the Securities and Exchange Commission has fallen sharply below its recent average. The Brattle Group, a consulting firm, estimated in a new report that the SEC filed 308 enforcement actions in fiscal 2026, which ended Sept. 30 — a 57% decline from the annual average of 710 the commission recorded from 2018 through 2025.
Brattle’s authors cited an array of factors that could have contributed to the slowdown, including the government shutdown at the beginning of the fiscal year and “persistently low staffing levels” at the commission. The SEC’s Enforcement Division also went through a leadership transition: Margaret Ryan stepped down as director in March and was replaced by David Woodcock less than a month later.
Britain’s Serious Fraud Office is separately trying to widen the pool of people willing to report financial crimes, and it has asked counterparts in the U.S. and Canada for tips. The agency launched a 12-week consultation earlier this month on a whistleblowing incentivization program, part of a wider effort to strengthen crime-fighting agencies against financial wrongdoing. Mia Kirby, the SFO’s deputy head of policy, said the fraud fighting unit wants more whistleblowers to step up as financial crime looks set to accelerate in the age of artificial intelligence.
Private-equity firms face a wall of debt that comes due starting in 2028, and fund managers are racing to negotiate loan extensions to avoid large losses from a potential wave of defaults by the companies they own.
Trade policy is another strand of the risk picture. Canadian aluminum plants, including smelters at Saguenay in a remote part of the Canadian forest, were turned into a production hub during World War II, when the United States needed aircraft and munitions quickly, and have supplied American industry since. President Trump’s trade war has put those smelters at the center of U.S. tariff policy, with U.S. businesses and consumers paying the price, according to The Wall Street Journal.
During parts of his first term, Trump exempted Canada from a 10% aluminum tariff that he imposed on other trading partners. After he returned to the White House, he stripped Canada of that exemption and raised the tariff rate on aluminum to 50%. Jérôme Pécresse, who runs Rio Tinto’s aluminum, lithium and Canadian businesses, spoke about the increased cost of Canadian aluminum in the U.S. under the 50% tariffs: “We cannot find a source of power in the U.S. which is anywhere close to what we have in Canada in terms of competitiveness.”
Legal-industry strain also features. Weil, Gotshal & Manges has engaged a top bankruptcy lawyer to advise on potential options should the law firm’s situation continue to deteriorate. Weil tapped Davis Polk bankruptcy partner Brian Resnick for that work, according to a person familiar with the matter. Davis Polk partner Neil Barr represented Weil in merger talks that fell through last week. Internal anxiety about the firm’s survival intensified after the talks failed; at least four additional top partners are departing for rival firms, and the firm’s would-be incoming leader no longer plans to take the role.
Most of the other items in the roundup remain open. Brattle’s authors offered an array of possible contributors for the SEC’s slowdown rather than a single cause, the SFO’s 12-week consultation on whistleblower incentives is still underway, and fund managers are negotiating extensions ahead of maturities that begin in 2028.