The Securities Docket recently hosted its 2026 Securities Enforcement Forum in New York, where regulators, prosecutors, defense counsel, and industry professionals discussed emerging trends and developments in securities enforcement and litigation. Key discussions from the event focused on expanding incentives for cooperation, increased scrutiny on prediction markets and traditional enforcement priorities, and a heightened focus on matters involving artificial intelligence.

Incentives for Cooperation Are Expanding

U.S. Attorney Jay Clayton noted that his office intends to increase incentives for companies that meaningfully cooperate in criminal investigations, including the potential use of non-prosecution agreements. The goal is to accelerate recoveries for victims while allowing prosecutors to focus investigative resources on individual wrongdoers.

During the event, panelists also emphasized the growing importance of early self-reporting to the SEC—in some cases even before an internal investigation is complete. Early engagement with regulators may provide companies with additional time and credibility as they work through complex facts, while demonstrating good-faith cooperation.

Importantly, cooperation was framed as going beyond legal minimums. It may include proactively sharing information, facilitating access to evidence, and aligning investigative efforts in ways that help regulators move more efficiently. At the same time, panelists stressed that cooperation does not mean abandoning advocacy. Companies can cooperate fully while continuing to present their positions and defend their interests.

Prediction Markets Likely to Face Increased Enforcement Scrutiny

Jay Clayton indicated that prediction markets are likely to face increased enforcement attention, with investor protection serving as the primary driver. In particular, he noted that insider trading risks, including trading based on nonpublic information that could affect event outcomes, are expected to be an area of focus in future prosecutions.

Panel discussions throughout the day also highlighted ongoing uncertainty around regulatory jurisdiction, including which agencies will ultimately take the lead in overseeing prediction markets. As these platforms continue to grow and attract retail participation, panelists suggested that enforcement activity may develop ahead of a fully settled regulatory framework.

“Trad Fraud” Is Still a Core Enforcement Priority

“Trad Fraud” emerged as a recurring buzzword throughout the day, used by panelists to describe the SEC’s continued focus on traditional enforcement areas. Discussions signaled the renewed attention on longstanding issues, including financial reporting fraud, insider trading, and market manipulation.

Recent enforcement activity reinforces this trend. The SEC has pursued accounting and disclosure cases against corporates and former executives, resulting in civil penalties. The decision to pursue enforcement in traditional areas signals continued emphasis on accounting fraud and core financial reporting integrity and a return to classic financial reporting issues rather than novel enforcement theories.

Also noteworthy, in a recent press release the SEC highlighted a company’s cooperation and remediation, reinforcing the broader theme discussed throughout the forum that cooperation remains an important factor in enforcement outcomes.^[1]

Artificial Intelligence Remains an Enforcement and Governance Focus

Litigation and enforcement activity relating to artificial intelligence remains a high priority for the SEC. Panelists noted that rapid adoption of emerging technologies often precedes enforcement activity as regulators work to address misconduct, disclosure gaps, and investor protection concerns after periods of market expansion.

Discussion also focused on how AI-generated evidence may appear in future investigations. Panelists noted that, as with traditional internet searches, regulators may increasingly examine AI tool usage and related communications as part of investigative record-building where relevant to intent or knowledge.

In addition, panelists highlighted the SEC’s growing interest in understanding how companies are incorporating AI into financial reporting processes and how auditors are using AI-assisted tools in testing and analysis. As adoption increases, regulators are expected to focus on governance, controls, and documentation surrounding AI use rather than the technology itself.

A consistent theme throughout the discussion was transparency, both in how companies disclose the use of AI and in how they safeguard information entered into AI tools. Panelists emphasized the importance of cybersecurity controls and data protection when using AI platforms. At the same time, some noted a perceived trend toward conservative cybersecurity disclosures, including potential overreporting of incidents, reflecting the more significant regulatory risks associated with failing to disclose material cyber events.