Earlier this week, broke the news that the Commodities Futures Trading Commission, which helps regulate the securities market, was told to stop investigating an eye-popping case of potential insider trading. The direction came from a top adviser to the agency’s Trump-appointed chairman, who ordered investigators to retract a referral to the agency’s lawyers surrounding suspiciously timed and lucrative oil trades that were executed minutes before the president sent social media posts rescinding threats to attack Iranian power plants.

This sidelined CFTC investigation is just the latest in a growing pattern: Enforcement of financial crimes is dropping in Donald Trump’s second term, unraveling offices and reforms that will be difficult to rebuild. It also is laying the groundwork for more corporate fraud, or even a broader financial crisis, in the long term, experts say.

This trend has affected each federal agency that handles financial crimes—including the Securities and Exchange Commission, which oversees Wall Street, the Justice Department, and the White House itself. Just a few months after Trump’s reelection, the SEC dismissed a case against crypto exchange Coinbase, then halted a prosecution against a Chinese crypto entrepreneur who bought millions in tokens from a Trump family crypto venture. Several months later, the White House pardoned crypto giant Binance and its ex-CEO.

Some drop in enforcement activity when a new president takes office is normal, says Eugene Soltes, a professor at Harvard Business School who studies white-collar crime and corporate compliance. That’s true regardless of party affiliation, because each new administration shifts its priorities and enforcement staff in the initial months after inauguration. But the current waning enforcement of white-collar crime, he says, goes beyond the typical dip that comes with a new presidency.

“I think it’s been clear that the current administration has been very vocal about having a lighter footprint and lighter-touch approach to disciplining companies,” Soltes says. “This seems to be a direct output of policy shifts.”The administration has continued to find new ways to avoid punishing corporate misbehavior. One month after Trump’s inauguration, he signed an executive order temporarily pausing enforcement of the Foreign Corrupt Practices Act, a bedrock of anti-corruption law that prohibits American companies from bribing foreign officials to benefit their business interests.

The law was enacted in response to a series of bribery scandals in the 1970s that embarrassed the United States on the global stage, and it inspired other countries to pass similar rules. Yet Trump’s order argued that the law was hurting American business opportunities. When his administration lifted the pause in June 2025, it did so with new guidelines that say FCPA enforcement should focus on cases where the actions of a US company abroad disadvantaged one of their competitors. In other words, bribery on its own isn’t that bad—if it hasn’t hurt a different US business.

Beyond just enforcement, the administration has also been issuing proposals to scrap corporate guardrails that have existed for decades. In September, for instance, the SEC issued a proposal to rescind what’s known as the “pay-to-play” rule: a nearly 20-year-old measure that prevents private equity firms and other investment advisers from buying access to billions of dollars in pension funds that belong to public employees. Last year, the SEC announced that it would mostly stop enforcing an 84-year-old agency rule that ensures shareholder concerns about a company have to be disclosed in some of their public filings. This September, the SEC proposed scrapping the rule entirely.

In the spring, the Justice Department also commenced a major overhaul in how it handles corporate crime. Attorney General Todd Blanche directed the agency to consolidate several divisions that investigated different kinds of financial crime. Over the summer, that consolidation became something called the “National Fraud Enforcement Division,” with plans to use enormous manpower—about 500 attorneys and staff—to deprioritize white-collar crime and instead pursue four main pillars: healthcare fraud, trade fraud (evading tariffs, for instance), tax evasion, and fraud against the government, particularly by taxpayers exploiting public benefits.

This last piece has been of particular importance to the White House, which appointed Vice President JD Vance to oversee the effort, pulled together a task force to study the issue, and claims to have uncovered $260 billion in federal benefit fraud already.

“There are a lot of parts to the Department of Justice that have been dramatically altered,” says Brandon Garrett, a professor at Duke University’s law school who tracks corporate prosecutions. “Department of Justice simply is not doing what it used to do, and corporate prosecutions are an example.”The impacts of reduced corporate crime enforcement often don’t become visible for years. Soltes notes that a decline in enforcement doesn’t necessarily mean companies immediately begin committing fraud; instead, there is often a gradual culture shift, in which companies and their boards invest less of their resources into internal compliance.

Longer term, though, drops in corporate crime enforcement and regulation have often preceded some of the country’s biggest financial crises, Garrett says.

In the late 1970s, for instance, lawmakers deregulated the nation’s savings and loan industry. By the late 1980s, roughly a third of the country’s S&Ls had collapsed, leading to bank failures and a taxpayer funded bailout of more than $120 billion. During the following decade, the SEC granted waivers that avoided deeper financial oversight to an energy company called Enron and also didn’t review its annual SEC filings for years.

By 2001, investors and journalists exposed Enron’s massive accounting fraud, and the company went bankrupt in what is still one of the largest bankruptcies in US history. Not long after, a regime of lax financial regulation and predatory lending led to the financial crisis of the late aughts, in which roughly 10 million Americans lost their homes to foreclosure.

“We’ve had these bubbles of corporate fraud in this country,” Garrett says. “The question now is: By pulling back on prosecutions, are we blowing a big bubble of potential corporate fraud that will come to harm us all?”