Securities and Exchange Commission must be independent, not beholden to Trump
In the early 1980s, when I was a lowly staff attorney in the Atlanta office of the Securities and Exchange Commission, I was surprised to get a phone call from an aide to Sen. Jesse Helms, a powerful North Carolina Republican and friend of President Ronald Reagan.
The aide wanted to discuss an insider trading prosecution we were about to bring against a prominent and apparently well-connected Charlotte businessman. I don’t recall the exact words I used, but the gist of my response was “Go jump in a lake.”
When I shared the conversation with my boss, he literally patted me on the back. The prosecution proceeded and the businessman ended up paying a fine and forfeited twice his profits on the illegal trade. There was no follow-up from Sen. Helms’ staff.
After 30 years of private law practice, I returned to the SEC’s Atlanta Regional Office as director, where I served until January 2018. I supervised the SEC’s enforcement and examination programs in five Southern states.
The Atlanta office had then and still has more than 100 highly trained, experienced lawyers and accountants. My tenure spanned the Obama and Trump administrations, so I served under their respective SEC chairs: Mary Jo White and Jay Clayton.
SEC dropping cases of three felons appears to be political
During my time as director, I never received, and to my knowledge no one in my office ever received, pressure from any politician.
If we had, the protocol was to politely wish them a pleasant day. In addition, it would have been inconceivable that White or Clayton would ever have attempted to inject politics into our office’s enforcement decisions.
Things are plainly different now. The SEC is no longer a proud, independent regulatory agency, immune from political influence. It now defers to the president.
In September 2025, the SEC, “in the exercise of its discretion,” dropped civil cases against three convicted felons, Devon Archer, Trevor Milton and Carlos Watson.
All three men had previously been found by federal juries to have cheated investors out of millions. All were granted pardons or clemency by President Trump in their criminal cases. Their prison sentences and restitution orders were wiped away.
Why did the SEC dismiss these cases? It strains credulity to explain these three dismissals as being based on prosecutorial discretion and not political pressure.
Archer had testified in a Republican-led inquiry into his former business partner, Hunter Biden. Milton and his wife had donated $1.8 million to the Trump campaign and related committees. Watson cast himself as a victim of “selective prosecution” and was close to the president’s pardon czar.
Presidential pardons are not supposed to have any legal effect on SEC civil enforcement actions.
By dismissing these cases, the commission denied wronged investors the possibility of the restitution the law says they deserved and allowed convicted felons to avoid any punishment.
Transactional view toward rule of law ruins SEC reputation
While the executive and legislative branches of government have always exercised some control over the commission — approving budgets, appointing and confirming commissioners and setting priorities — it previously would have been inconceivable for the president to directly influence an SEC enforcement proceeding.
Stable financial markets demand prosecutorial decisions based on evidence, statutory mandates and legal principles — and not the type of political calculations that led to the dismissal of SEC civil cases against Archer, Milton and Watson.
If the SEC is viewed as beholden to the political whims of the president and allows large donors and other well-connected people to avoid civil prosecution for securities fraud in cases where investors lost millions of dollars, it is difficult to imagine how the commission can continue to fulfill its statutory mission: maintaining fair and efficient markets, protecting investors and facilitating capital formation.
In addition, the dismissal of the SEC’s civil enforcement actions against the three convicted felons means that these men will not be required by the government to make their victims whole. They will also be allowed to be an officer or director in public companies, where they might again be able to commit securities fraud.
For decades, the United States has had the most vibrant and transparent capital markets in the world. With a compromised SEC, which apparently now takes a transactional view toward the rule of law, it is hard to see how our capital markets will maintain that reputation.
Walter E. Jospin, an Atlanta lawyer, is a retired partner of Paul Hastings LLP and former head of the Atlanta Regional Office of the SEC.
