06.12.25. Following the postponement of the new Form PF, on June 11, 2025, and on June 12, 2025, the U.S. Securities and Exchange Commission (“SEC”) formally withdrew 14 proposed rules, most of which were introduced between March 2022 and November 2023. This action represents a notable shift in regulatory priorities under the current administration.
The withdrawn proposals addressed a wide range of areas, notably including cybersecurity, environmental, social, and governance (“ESG”) disclosures, market structure reforms, outsourcing, safeguarding client assets, investment adviser responsibilities, and shareholder proposal procedures. These topics involve complex regulatory considerations, and the withdrawal may indicate a reassessment of how the SEC intends to approach them in the future. While these proposals have been removed from consideration in their current form, this does not necessarily mean the issues are off the table permanently. The SEC may revisit some of these topics through revised rulemaking or new approaches in the future.
Importantly, this move only affects rules that have not yet been finalized. Key finalized rules, such as those relating to anti-money laundering and Regulation S-P, remain in force. These have upcoming compliance deadlines, with some taking effect in late 2025 and others in 2026; implementation of these final rules may be subject to delay or postponement as was the case earlier this month with respect to Form PF amendments.
fund Auctus Fund Management, LLC, failed to register as a securities dealer, in yet another example of administrative curtailment under the new Paul Atkins led SEC regime. The SEC targeted firms that had a focus on convertible notes, where funds would acquire convertible notes from penny stock issuers, convert those notes into shares of stock at a large discount from the market price, and sell the newly issued shares into the market at a significant profit. This practice, the SEC claimed, required Auctus and two other firms, to register as securities dealers. In addition to Auctus, the SEC also dropped cases against John M. Fife and his firm, Chicago Venture Partners, L.P.,as well as Curt Kramer and his businesses Power Up Lending Ltd., Geneva Roth Remark Holdings, Inc., and 1800 Diagonal Lending, LLC. The SEC is continuing to move away from and drop cases that expanded historical broker-dealer registration requirements.
Slimmed Down, But Still Watching
05.30.25. Following the recent Department of Government Efficiency (“DOGE”) budget cuts to the SEC, the Commission announced it was requesting a flat budget of $2.15 billion for the 2026 fiscal year, maintaining the same level as the
current year. The agency also plans to reduce its workforce by nearly 10%, from 4,548 to 4,101 full-time positions, following recent voluntary staff departures. These cuts come after early-resignation programs that resulted in about 600 employees leaving, with some divisions losing up to 19% of their staff. The SEC noted that keeping its budget flat will leave it with over $100 million in surplus, which could be necessary due to uncertainties, such as potentially absorbing duties from a U.S. audit watchdog that may be dissolved.
California Adviser Caught with Cannabis-Client’s Cash
06.17.25. On June 4, 2025, the SEC filed a complaint against Andrew Nash and El
Capitan Advisors (“ECA”), for breaching their fiduciary duty to their advisory client by misappropriating $15.3 million from their accounts. Nash was reported to use about a third of the money to buy a $4.6 million home in Santa Barbara, while falsifying bank statements to hide his theft. In 2023, Nash reported ECA had over $7.4 billion in assets under management; in reality, ECA had about $85 million. In 2022, he reported $3.6 billion while actually having $62 million under management.
The matter was resolved swiftly, with Nash consenting to the SEC’s settlement less than two weeks later. The final judgments orders (i) Nash to disgorge ill-gotten gains of $4.6 million plus prejudgment interest of approximately $800,000; (ii) ECA to disgorge ill-gotten gains of $10.7 million plus prejudgment interest of $1.8 million; and Nash to pay a civil penalty.
Ontrak CEO On Track to 42 Months in Prison
06.24.25. Terren Scott Peizer, former CEO and chairman of Ontrak Inc. was sentenced to 42 months in prison and fined $5.25 million for insider trading. He
used Rule 10b5-1 trading plans to sell company stock based on material non-public information (“MNPI”), avoiding losses of over $12.5 million. Peizer implemented the plans shortly after learning that Ontrak's largest customer intended to terminate its contract, without observing the recommended “cooling-off” period. Ontrak’s stock fell over 44% after the termination was announced. This marks the first insider trading conviction based solely on misuse of Rule 10b5-1 plans. Peizer was found guilty in June 2024 of securities fraud and insider trading following a jury trial. The case was part of a broader initiative to address executive abuses of 10b5-1 plans and was investigated by the FBI with support from FINRA.
Golsharifi Fined for Laboratory Lies
06.23.25. In 2023, the SEC filed a complaint against NDB Inc. and Nima
Golsharifi for fabricating information to raise $1.2 million in capital from investors in an August 2020 press conference. Golsharifi claimed that NDB’s nuclear-based batteries had been successfully tested in two distinguished laboratories and that the company had secured two beta customers, the SEC claims both statements were false.
NDB and Golsharifi, who were ordered to pay $200,000 and $100,000 in fines, respectively. Golsharifi is barred from “participating in the issuance, purchase, offer, or sale of any security” for two years, as well as banned from serving as a director or officer of any public company for two years.
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