The following is a guest post from Natalie Thomas of the law firm Allen & Thomas. We hope you’ll appreciate Natalie’s insight and expertise. Enjoy!
As we enter the latter half of 2025, the corporate and securities landscape continues to evolve under the current administration. For companies raising capital and navigating corporate governance, understanding these changes is more critical than ever. Below, we summarize the key developments and what they mean for your business.
Key Areas of Change
1. Deregulation and Capital Raising
The administration is prioritizing deregulation and capital formation, aiming to make it easier for companies to access funding. Notably, the SEC has rescinded interpretive guidance (such as Staff Accounting Bulletin No. 121) and is considering sweeping reforms, including:
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Redefining “security” for digital assets and clarifying registration and disclosure requirements for cryptocurrency offerings.
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Broadening or eliminating accredited investor restrictions, potentially allowing Rule 506 offerings to self-certify investor status. This could expand the pool of eligible investors for private offerings, making it easier for companies to access private capital.
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Exempting micro-cap offerings from registration requirements and abolishing or revising rules on securities resales. This change could reduce regulatory burdens, making it more cost-effective for smaller companies to raise funds privately without needing to go through the full registration process.
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Simplifying filer status definitions and loosening requirements for emerging growth companies (EGCs), possibly eliminating quarterly reporting for certain issuers.
These changes are expected to streamline capital raising and reduce compliance burdens, but companies must remain vigilant about evolving disclosure and registration obligations.
2. Consolidation of Regulatory Control
The White House has moved to consolidate regulatory power, directing independent agencies like the SEC to centralize decision-making at the Commission level and embedding White House liaisons within key agencies. This shift modifies the traditional regulatory structure and increases executive oversight, which may affect the timing and nature of regulatory processes.
3. Impact of Economic Protectionism on Private Capital
Changes in international trade policies affecting various trading partners, has implications for securities law, particularly in the realm of private capital. These protectionist policies can impact private capital markets by affecting the valuation of companies engaged in international trade, as increased costs of imports may lead to reduced profit margins and altered business strategies. Additionally, companies seeking private capital may face heightened scrutiny from investors regarding their exposure to international markets and the potential financial impact of these tariffs. This environment may lead to increased due diligence requirements and a focus on domestic market strategies when raising private capital, as investors seek to mitigate risks associated with international trade uncertainties.
4. Federal vs. State Contradictions
While the administration aims to assert federal control, state regulators are intensifying their enforcement efforts in areas where federal oversight has decreased, particularly affecting securities laws in the context of private capital. This shift results in a complex patchwork of regulatory requirements and enforcement priorities, posing challenges for companies seeking private capital and operating across multiple jurisdictions. As a result, businesses must navigate varying state regulations and enforcement actions, which can impact their compliance strategies and capital-raising activities.
5. Effects of Federal Workforce Reduction on Securities Regulation
The new executive order to shrink the federal workforce and streamline government operations could significantly impact the SEC by potentially slowing regulatory responses and reducing the availability of agency guidance. With staff reductions and the closure of regional offices, the SEC may face challenges in maintaining its oversight and enforcement capabilities, which could lead to delays in processing filings, issuing new regulations, and providing timely guidance to companies. This may particularly affect companies navigating securities law and seeking private capital, as they rely on the SEC for clear regulatory frameworks and guidance to ensure compliance.
6. SEC Enforcement Under New Leadership
With a new chair focused on deregulation and crypto, the SEC is shifting its enforcement priorities:
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Reduced emphasis on novel or aggressive enforcement in areas like digital assets, ESG, and cybersecurity.
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Focus on “bread and butter” securities fraud—insider trading, Ponzi schemes, and accounting fraud—while leaving oversight of smaller firms to state regulators.
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Fewer enforcement actions against the crypto industry, with a preference for rulemaking and public guidance over punitive measures.
7. Accountability and Risk Remain Paramount
Despite these changes, companies and their executives remain accountable for past and present actions. Regulatory risk and litigation risk persist, even if federal agencies reduce enforcement. Investors, state regulators, and private litigants may still pursue claims, making robust compliance and governance practices essential.
What this Means for Your Business
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Stay Informed: Regulatory changes are rapid and ongoing. Regularly review new rules and guidance to ensure compliance.
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Assess Impact: Evaluate how deregulation, centralization, and protectionist policies affect your capital raising, governance, and international operations.
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Monitor State Activity: Be prepared for increased state-level enforcement and adapt your compliance strategies accordingly.
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Prepare for Risk: Maintain strong internal controls and governance frameworks to mitigate regulatory and litigation risk, regardless of federal enforcement trends.
Navigating the Evolving Regulatory Landscape with Allen & Thomas LLP
We are a boutique business law firm with offices in New York City and Los Angeles. Allen & Thomas brings over 30 years of securities experience to the table. In light of the significant changes under the new administration affecting corporate and securities law, Allen & Thomas stands ready to guide your business through this evolving landscape. Reach out for a consultation today to ensure compliance with the ever-evolving regulatory landscape.
Email: [email protected]
Disclaimer: Informational Content Only
This content is for informational purposes only and does not constitute legal advice. The content is not intended to create, and receipt of it does not constitute, an attorney-client relationship. For guidance to your specific situation, please contact our office.
