Trump’s Budget Cuts Hit SEC: Regional Directors on the Chopping Block
The U.S. Securities and Exchange Commission (SEC) is reportedly preparing to eliminate its regional office directors as part of a broader effort to align with the Trump administration’s cost-cutting measures.
The agency informed the directors of its ten regional offices on Feb. 21 that their roles would be eliminated under a restructuring plan set to be filed next month, according to a Feb. 24 Reuters report citing sources familiar with the matter.
Despite the planned personnel cuts, the SEC does not intend to close its regional offices, which serve as key hubs for investigations and enforcement actions across the country. The move follows the SEC’s closure of its Salt Lake City office in June, a decision attributed to “significant attrition.” The shutdown occurred just a week after a federal judge in Utah imposed a $1.8 million fine on the agency for “bad faith conduct” in its case against crypto firm DEBT Box, which resulted in the resignation of two SEC lawyers in April.
The financial regulator has not yet provided an official comment on the reported plan.
Regulatory Shift Under DOGE-Led Cost-Cutting Initiative
The proposed restructuring is part of a broader shift in federal regulatory policy under President Donald Trump, whose administration is pushing aggressive budget reductions. The effort is spearheaded by the Elon Musk-led Department of Government Efficiency (DOGE), which has been tasked with identifying and eliminating wasteful spending across government agencies.
A DOGE-affiliated account on Musk’s social media platform, X, has been actively soliciting tips from the public regarding potential “waste, fraud, and abuse” at the financial regulator. This initiative appears to be targeting the agency’s operations amid a broader government-wide downsizing effort.
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SEC Budget Battles and Crypto Enforcement Retreat
The SEC submitted its 2025 fiscal year budget request to Congress in March, seeking $2.6 billion while emphasizing that the proposal is “deficit neutral.” However, internal reports suggest that senior staff are already working closely with DOGE to implement budget reductions, with agency leaders directing various departments to submit restructuring plans to acting chair Mark Uyeda by Feb. 25.
The proposed elimination of regional directors will require a vote by the SEC’s three-member commission, which currently consists of two Republican commissioners—Uyeda and Hester Peirce—and one Democrat, Caroline Crenshaw.
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The agency has already begun scaling back its regulatory initiatives, particularly those targeting the cryptocurrency industry, which had been a key focus under former Chair Gary Gensler. In recent months, the agency has reportedly downsized its crypto enforcement team, paused several lawsuits against crypto firms, and reassigned its former top crypto litigator to an IT role.
Impact on the SEC’s Role and Enforcement Capabilities
The agency’s ten regional offices, which include locations in major financial and tech hubs such as New York and San Francisco, as well as in cities like Atlanta and Boston, have played a crucial role in monitoring and investigating firms across the country. The removal of regional directors raises concerns about the agency’s ability to effectively oversee financial markets and enforce securities laws.
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Critics argue that the move could weaken regulatory oversight, particularly in emerging sectors such as cryptocurrencies, where the the financial regulator has faced pushback for its aggressive enforcement actions. Meanwhile, proponents of the restructuring claim it will eliminate bureaucratic inefficiencies and align the agency with Trump’s broader initiative to reduce government spending.
