Trump’s Pardons Gut SEC Enforcement, Let Securities Fraudsters Off the Hook

President Trump’s reckless use of the pardon power is not just a political scandal — it’s actively undermining financial justice. By pardoning convicted securities fraudsters during his second term, Trump has forced the Securities and Exchange Commission (SEC) to abandon civil enforcement actions against some of the biggest names in recent fraud cases.

The SEC dropped cases against Ozy Media co-founder Carlos Watson, Nikola founder Trevor Milton, and venture capitalist Devon Archer, all beneficiaries of Trump’s clemency. These individuals were initially ordered to pay a combined $176 million in restitution and fines, but thanks to Trump’s pardons, the SEC has walked away without penalties or repayments for investors who suffered losses.

Liz Oyer, a former pardon attorney for the Biden Justice Department, explains the problem bluntly: “When the criminal conviction is wiped out, that leaves a lot more water for the SEC or other agencies to carry, which makes their position more challenging.” In other words, the SEC can no longer rely on criminal convictions to back up civil penalties, forcing it to drop or reduce enforcement efforts.

This pattern is particularly damaging because the pardoned individuals were often the key figures with the most assets to compensate victims. Shant Karnikian, a lawyer tracking Trump-era pardons, notes that losing the “figurehead” defendants from enforcement actions severely limits investor restitution.

The SEC’s enforcement chief Paul Atkins claims the agency is focusing on the worst misconduct, but the evidence tells a different story. The SEC dropped charges against Watson and his company Ozy after Trump commuted his sentence, despite a federal judge calling the fraud “exceptional” and sentencing Watson to nearly 10 years in prison. The SEC also declined monetary penalties against other Ozy executives who cooperated with the investigation.

Even more troubling, the SEC’s recent enforcement shakeup and dropped cases involving crypto billionaires linked to Trump’s circle raise questions about political influence. Legal experts like Richard Painter, a former White House ethics lawyer, warn that the SEC’s swift dismissal of cases post-pardon is “political” and reflects a reluctance to anger the president.

Private lawsuits remain a possible path for investors seeking justice, but the SEC’s retreat signals a chilling effect on regulatory enforcement. Career civil servants may hesitate to pursue cases against individuals likely to receive pardons, weakening the government’s ability to police financial crimes.

Trump’s pardons are not just acts of mercy; they are calculated moves that reward loyalty over law and cripple agencies tasked with protecting the public from fraud. The SEC’s capitulation reveals how far the administration’s corruption extends — from the White House to Wall Street, no one is safe from the fallout.

We will keep tracking how Trump’s abuses of power continue to erode accountability and harm everyday Americans. The fight for justice in the face of presidential impunity is far from over.