At the Money: The New Deregulatory SEC with Michelle Leder (December 24, 2025)
Big changes are afoot at the Securities and Exchange Commission. More IPOs, more crypto, and less enforcement are coming as the SEC becomes smaller and much more corporate-friendly. What might this mean for investors?
Full transcript below.
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About this week’s guest:
Michelle Leder is a researcher covering corporate SEC filings; she founded the research service “Footnoted,” focusing on uncovering material information hidden in corporate SEC filings. She’s the author of the book, “Financial Fine Print, Uncovering A Company’s True Value.”
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TRANSCRIPT:
INTRO: Breakin’ rocks in the hot sun
I fought the law and’a the law won
I fought the law and’a the law won
What’s going on with the rules for company disclosures? Are they changing what’s happening with crypto companies, mergers and acquisitions, even executive comp. It’s now under a new regime at the SEC and some shareholder activists are crying foul.
What’s going on with the new deregulatory zeal?
To help us unpack all of this and what it might mean for your portfolio, let’s bring in Michelle Leder. She is an SEC filing specialist and founder of the research service “footnoted” focusing on material information hidden in corporate SEC filings. She’s also the author of the book, “Financial Fine Print, Uncovering A Company’s True Value.”
Let’s start out talking about the new regulatory stance, or I should, should I say deregulatory stance at the SEC? It’s a little easier. It’s a little more corporate friendly. What’s the state of regulations for public companies these days?
Michelle Leder: Obviously the basic rules haven’t changed. the 1933 act is still there, all of those rules are still there. It’s the enforcement that is, a bit up in the air.
Shutting studies are showing that the SEC is doing a lot less enforcement these days. and some of it is partly due to staffing issues, right? Like the SEC, I think a lot about 20% of the staff have left. Since the beginning, well, since January 20th, since, since, uh, Trump Term 2, people left or they took the buyout or, or what have you.
But, enforcement, either by number of cases or the size of the settlements. The SEC is justkind of sleeping – they’re just not as active as they’ve been in the past. And that’s been well documented by some academic studies and some other people who follow that part of the SEC.
There’s also been, uh, the dismissal of several big name cases. So it’s overall a deregulatory environment, much more so than, the first Trump administration.
Barry Ritholtz: You mentioned the reduction in headcount. The IRS has seen a large headcount reduction, and that legitimately shows up in both enforcement and collection actions. The, the Senate, uh, released report last year, you can actually see for every dollar they spend on the IRS, here’s how much we generate in taxes collected.
That reduction has been some attrition, some of it from Doge. It sounds like you’re saying the SEC is seeing. A very similar reduction. Did, did I hear you right, did you say it’s more than 20% of the staff? Is that enforcement staff or just across the board? I think it’s across the board.
Michelle Leder: Across the board, and presumably it would include, administrative folks?
it’s, it’s the numbers I’ve seen, it’s about 28. Percent across the board. And of course the SEC has a lot of contractors, like outside people. So I think it also includes contractors. there’s no definitive headcount that I’ve seen, but this has been reported, by multiple outlets. That’s around 20%.
Barry Ritholtz: There’s a new sheriff in town. Paul Atkins is the head of the SEC. Tell us a little bit about the philosophy. And policies of the new SEC chairman?
Michelle Leder: He is a former SEC commissioner, so, this is not his first time, at,the SEC, but it is the first time that, he’s chairman. He’s an attorney.you don’t. Have to be an attorney to be an SEC commissioner. But almost always it is an attorney who is doing it
He’s known for being a big booster of crypto in between the time, like when he left the SEC last time and, went to work, in private practice he was, representing a number of crypto firms. He is of course taking that, background with him to the SEC. I joke around like, and I’m gonna be dating myself here, but like, that, uh, episode of the Brady Bunch where it was like “Jan, Jan, Jan”. Well this is like “Crypto, crypto, crypto.”
That’s all it seems like the SEC is really focused on,and there’s normally, the other thing is that there’s normally five SEC commissioners, and there’s only been four since Atkins came on board. It’s typically, uh, the party in power. So the Republicans named three commissioners, and then the party out of power. The Democrats named two, but there hasn’t been, I’m sorry, not the president has to name the SEC commissioners. So three from, the majority party and two from the minority party.
Needless to say, there hasn’t been a democratic, uh, commissioner that’s been named. So they’re operating with only four.
And it’s, so there’s basically only one person who is kind of like sounding the alarm on all this crypto stuff. Anytime there’s like a new regulation or like a change in regulations, it’s interesting to see what’s said there about all of these changes that are going on
Barry Ritholtz: Beyond crypto I’ve heard Atkins, uh, talk about,the initial public, uh, offerings market, and he wants to jumpstart again. I kind of laughed at make IPOs great again. What, what are your thoughts on the regulation that some people have said the burdensome reporting requirements are leading American companies to stay private longer. What are your thoughts there?
Michelle Leder: There is, some regulation that probably could be trimmed, but do you do it with like, a scalpel or do you do it with like a chainsaw? I think with anything, there’s things that can always be made better and improved, right? But this wholesale approach to like all regulation is bad. It’s costing people money is a little bit of an overkill,
You can make an argument for example, they nixed the climate rules that they had been working on forever. You could probably make an argument that, maybe the climate rules went a little bit too overboard; it was gonna be cumbersome for companies to do, you know.
But climate change is real and some companies are impacted by it more than others. And, there should be disclosures. Because there is a risk to investors about that.
Barry Ritholtz: Let’s talk about what’s probably the single biggest idea that’s been floated by President Trump, doing away with quarterly earnings reporting. You’re an SEC geek. What does this sort of thing mean from your perspective and, and what does it mean for investors?
Michelle Leder: First of all, let’s remember, I think they say like, oh, small companies. This is not like your corner store, your little bodega in Manhattan and they’re suddenly having to like, put out a 10 K or a 10 Q.
These are publicly traded companies that are asking me and thousands of other investors for our, for our money to grow their business and to, build their businesses. Now this idea that you can throw out the baby with the bath water, so to speak.
Could there be a little bit less in the quarterly earnings. Yeah, maybe we don’t have to do like the PowerPoint presentation and the detailed earnings call and like the big thing, but still report earnings, and, give people a taste of what’s going on.
Going to every six months would be really bad for investors overall. Maybe it’ll benefit the, the largest, most sophisticated investors, but other people who are invested in stocks, it’s just bad news — a lot can happen in six months to say the very least.
Barry Ritholtz: A lot happens in three months, so, yeah. So let’s, let’s talk about executive compensation. I have a lot of, a lot of questions to throw you away with this,
Obviously we have to start with Elon Musk and the trillion dollar package that the board approved. I don’t see any way how he ever gets anywhere near that amount of money, but still it seems like just crazy sky’s the limit amount of compensation.
Are, are these giant stock grants a new trend? Is this something that’s here to stay?
Michelle Leder: There’s of course always been stock grants. and you wanna reward someone, I’m all about, rewarding someone for doing a good job, right?
If a CFO, manages or a CEO manages to turn around the company, they should be rewarded. That’s what, that’s what capitalism is about. Right?
What we’re seeing in the wake of the Elon vote, where shareholders overwhelmingly approve the compensation. And, Tesla is sort of a special situation because it’s like a cult of personality – I can’t think of many other CEOs, let’s say, that have that kind of platform that kind of, personal, identification to, obviously because of X and, and all of his followers on X and the fans of Tesla, the cars and everything. So it’s this a bit of a unique situation.
But we’re seeing in the wake of that situation, we’re seeing a number of examples where executives are also being rewarded and what seems like outsized awards. It’s almost like, well, Tesla did it, so why can’t we? It’s almost like it’s created like a green light for, giving away additional equity,
I was just looking the other day ZoomInfo, which is a company that sells all our information to whoever, the highest bidder, gave its founder and its CEO.
The guy had been there, has been there 18 years. And it gave him nearly 10 million shares to incentivize him. Does this guy really need 10 million shares to be incentivized? He’s been at the company 18 years, so where’s the guy going? Also the stock is not doing so great. So why is he being rewarded again?
It comes down to the stock is doing great. Reward the CEO, reward the C-suite, you know? But if the stock isn’t doing good and you’re giving away 10 million shares to someone. You know who’s been there to incentivize them. You shouldn’t need to be incentivized to like turn the stock price around.
Barry Ritholtz: Let talk about executive compensation clawbacks. How often do we see either the company or its shareholders or perhaps the SEC saying, Hey, this compensation. Uh, was, was very,undeserved, unearned, and we’re gonna try and claw some of this back. Tell us about that…
Michelle Leder: Usually you’re seeing that on the plaintiff lawyer side, like, of course there’s a very active plaintiff’s bar here in the US where, if a company says that they’re gonna earn 25 cents a share, and suddenly they, report 20 cents a share, there’s, a whole group of lawyers + law firms that, will then sue the company and try to, do clawbacks and that type of thing. You’re not really seeing that on the SEC side so much.
Most companies, or I would say a majority of companies do have clawback policies, but usually it’s kind of rare that, uh, they claw back money. I can really only think of a couple of examples. where there’s been, a claw back of compensation. It’s not something that happens all that regularly.
Barry Ritholtz: You mentioned crypto earlier. What is the regulatory framework look like for crypto? How have the rules changed? It seems like the SEC has fully embraced this.
Michelle Leder: There’s just a general, lessez faire approach to crypto at the SEC, whereas, which is very, very different, than the prior. SEC chairman Gary Gensler. he was all about regulating crypto and, and trying to call it into account and, and, making sure that, it wasn’t, scamming people. And I would say that the current SEC is basically, a 180 degree turn from that.
And in fact, I feel like crypto in terms of some of their rules and regulations, it seems to be the only thing that they care about. they’re talking about, combining with doing, regulatory combinations to kind of make it easier to do this.
I think in general, different people have different views about crypto. I think that anything that makes it easier for people to get into crypto, especially less sophisticated investors, is, is problematic. I don’t think like someone’s grandma should be in crypto
Barry Ritholtz: What about cyber security disclosures? That, that seems to be a new requirement. It, it seems to be really important in the financial industry. How important is, is cybersecurity to any publicly traded company? What, what are their obligations there?
Michelle Leder: A couple years ago in 2022, the SEC put in new rules – again, this was under Gary Gensler – that required a lot more disclosure about cybersecurity incidents.and they required companies to actually disclose this in an 8K using a section, a particular section, so that it could be found very easily. instead of a cyberissue, if you were looking for cybersecurity incidents, you can find them pretty quickly.
But, companies are still disclosing this in haphazard ways. Even though they’re required to disclose this in a specific section of the eight K, many companies are not doing that.
And to be fair, the problem with a lot of these cybersecurity incidents is when companies first disclose them, they don’t know if it’s gonna be like a, a five, thousand dollars fix or a 500 million dollars fix.
Oftentimes, it takes time to get in there, figure out what’s really going on. But of course, these hacks and these cybersecurity incidents have gotten a lot more, sophisticated these days. I’m sure like, I can’t count the number of text messages I get that seem alert.
I got a new one the other day, someone put an event on my calendar. And was waiting for me to accept it. And I’m like, how did you even, find this on my calendar? There’s a lot of scamming going out there, and you can imagine if you’re like a big company with a lot more money than, Michelle Leder has that, the efforts are a lot more intense to try to figure out poke holes.
Unfortunately there’s bad actors out there and cybersecurity, is, is much more important. we do everything online these days. We pay our bills online, and so there’s a lot of incidents that are going on, some of which we probably don’t even know about.
Of course, if it’s very big, we kind of remember the ones, like Home Depot had an incident a number of years ago. I feel like, the number of times I’ve gotten an email from Kroll offering to like from some company offering to like, secure my, identity for a year has grown exponentially recently.
Barry Ritholtz: To wrap up, there’s a new deregulatory regime in Washington DC. It’s very crypto friendly. It’s not particularly ESG or climate change friendly, and it’s gonna have an impact on what companies are obligated to disclose to their shareholders. We’ll find out the impact of this over the next few years.
I’m Barry Ritholtz You’ve been listening to Bloomberg’s at the Money.
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