Masters in Business – "The New Deregulatory SEC"

Host: Barry Ritholtz (Bloomberg)
Guest: Michelle Leader – SEC filing specialist, founder of Footnoted, author of "Financial Uncovering a Company's True Value"
Release Date: December 24, 2025

Overview

This episode delves into the significant deregulatory shift underway at the U.S. Securities and Exchange Commission (SEC) following the beginning of President Trump's second term. Barry Ritholtz and expert guest Michelle Leader explore the weakening of enforcement, the crypto-friendly policies under new SEC Chairman Paul Atkins, the impacts on reporting requirements, executive compensation, and the evolving landscape for critical disclosures like cybersecurity. The conversation addresses who benefits from these changes and considers risks for investors in a looser regulatory regime.

Key Discussion Points & Insights

1. The Changing State of SEC Regulations

• Main Point: The foundational securities laws are unchanged, but enforcement is dramatically reduced.
• Leader: "It's the enforcement that is, you know, a bit up in the air...The SEC is doing a lot less enforcement these days...they're just not as active as they've been in the past." (02:52-03:29)
  • Cites staff reductions (~20%) across the agency, including contractors.
  • Reduction linked both to political shifts and attrition during administration change.

2. Reduction in SEC Staff and Enforcement

• Staff reduction is affecting the agency's ability to enforce existing rules.
  • Ritholtz: Parallels to IRS headcount cuts and enforcement drops. (03:55-05:00)
  • Leader: "The numbers I've seen, it's about 20% across the board...includes contractors." (04:37-05:00)

3. Profile and Philosophy of New SEC Chair Paul Atkins

• Background: Former SEC Commissioner, attorney, crypto proponent.
  • Leader: "He's just known for being a big booster of crypto...when he left the SEC last time and...went to work in private practice, he was...representing a number of crypto firms." (05:12-06:00)
• Crypto-Focus: Describes internal focus as "crypto, crypto, crypto."
  • "This is like crypto, crypto, crypto. And that's all it seems like the SEC is really focused on." (06:00-06:15)
• Commission is one member short, with no minority-party nominee, reducing dissent.

4. Push to 'Make IPOs Great Again' and Deregulate Reporting Requirements

• Atkins and the current regime aim to reduce burdens seen as discouraging companies from going public.
  • Some regulations may be unnecessarily burdensome, but others serve key transparency functions.
  • Leader: "Do you do it with, like, a scalpel or do you do it with, like, a chainsaw?...I think this wholesale approach to, like, all regulation is bad and it's costing people money is a little bit of an overkill." (07:34-08:10)
• Example: Climate risk disclosure rules were scrapped.

5. Proposal to End Quarterly Earnings Reporting

• Potential move to semi-annual reporting ("every six months") may disproportionately disadvantage smaller, less sophisticated investors.
  • Leader: "Going to every six months would be really, you know, bad for investors overall...a lot can happen in six months." (08:47-09:56)
  • Small investors could be left in the dark compared to institutional players.

6. Trends in Executive Compensation

• Discussion on outsized CEO pay packages (e.g., Elon Musk at Tesla) and proliferating use of massive stock grants.
  • Leader: "It's almost like it's created a green light for...giving away...additional equity." (10:36-11:36)
  • Specific case: ZoomInfo's founder received 10 million shares as "incentive" despite long tenure and poor stock performance.
  • Questions the rationale for rewarding executives when stock performance does not justify it.

7. Clawbacks on "Unearned" Compensation

• Clawbacks are not commonly implemented, usually initiated by plaintiff attorneys not the SEC.
  • Leader: "It's kind of rare that, you know, they claw back money. I mean, I can really only think of a couple of examples..." (13:08-13:57)

8. The SEC's New Laissez-Faire Approach to Crypto

• Under Atkins, the SEC's stance toward crypto is nearly the opposite of Gensler's strictness.
  • Leader: "A 180 degree turn...crypto, in terms of some of their rules and regulations, it seems to be the only thing that they care about." (14:09-15:00)
  • Concern over regulatory "combinations" making crypto easier to access, increasing risk for less sophisticated investors.
  • Ritholtz: "I don't think like someone's grandma should be in crypto, to say the very least." (15:15-15:25)

9. Cybersecurity Disclosure Requirements

• Prior rules (2022) under Gensler increased required disclosures on cyber incidents and made them easier to find.
  • Compliance has been inconsistent, as companies still report new incidents haphazardly.
  • Leader: "A lot of incidents...are going on, some of which we probably don't even know about." (17:10-17:37)
  • The scale of cyber threats and disclosure lapses is growing, problematic in the new deregulatory climate.

Memorable Moments & Notable Quotes

• On Enforcement:

  • "Enforcement...the SEC is just kind of sleeping. They're just not as active as they've been in the past."
    — Michelle Leader (03:24-03:29)

• On Crypto Priority:

  • "This is like crypto, crypto, crypto. And that's all it seems like the SEC is really focused on."
    — Michelle Leader (06:04-06:07)

• On Deregulation Methodology:

  • "Do you do it with, like, a scalpel or do you do it with, like, a chainsaw?"
    — Michelle Leader (07:35-07:37)

• On Frequency of Reporting:

  • "A lot can happen in six months."
    — Michelle Leader (09:41-09:43)

• On Big Executive Paydays:

  • "Does this guy really need 10 million shares to be incentivized? I mean, he's been at the company 18 years..."
    — Michelle Leader (12:17-12:24)

Timestamps for Important Segments

• 01:45 – Introduction of topic and Michelle Leader
• 02:52 – Shift in enforcement and staff reductions
• 05:00 – Profile of new SEC chair Paul Atkins
• 07:04 – Push to deregulate IPO requirements
• 08:27 – Debate over eliminating quarterly earnings reports
• 10:02 – Executive compensation mega-grants discussion
• 13:08 – Frequency and legal context of compensation clawbacks
• 13:57 – The SEC’s new pro-crypto regime
• 15:36 – Cybersecurity disclosure compliance and challenges
• 17:52 – Recap and episode wrap-up

Tone & Language

The episode is conversational yet sophisticated, blending policy analysis with accessible metaphors (e.g., "scalpel or chainsaw," "cult of personality"), humor ("crypto, crypto, crypto" like "Marcia, Marcia, Marcia"), and practical examples. Both Barry and Michelle speak candidly—with a critical and slightly skeptical edge—especially toward regulatory rollbacks and crypto exuberance.

Summary

This episode of "Masters in Business" casts a critical eye on the SEC’s pronounced deregulatory turn under Chair Paul Atkins, highlighting how reduced enforcement, staffing cuts, relaxed reporting obligations, and a sharp embrace of crypto assets are reshaping the regulatory environment. While Michelle Leader acknowledges there’s room for improvement in regulation, she warns of overreach in deregulation, risks for ordinary investors, and weakening transparency. The shift portends less oversight of major market activities just as tech, cyber threats, and complex new assets proliferate.

End of Summary