Americas
Trump orders investigation into SEC ‘weaponization’
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January 27, 2025

President Donald Trump signed an executive order on January 20, ordering an investigation into whether the U.S. Securities and Exchange Commission (SEC) was weaponised by the Joseph Biden administration as part of a campaign against its political enemies. It could put the proposed SEC chair, Paul Atkins, in the position of investigating his predecessor, Gary Gensler.
“In classic Trump fashion, he is now doing to his enemies what he claims they have done to him—that is, turning the power of the government against them in an effort at retribution. While the orders are ominous, however, they are also vague. They could conceivably generate either a campaign of retaliation, or nothing at all,” wrote Quinta Jurecic, a fellow in governance studies at the Brookings Institute and a senior editor at Lawfare.
In 2023, the SEC settled fraud charges against a special purpose acquisition company, Digital World Acquisition Corporation, which ultimately merged with Trump Media & Technology Group in March 2024. It paid a $18 million fine for making material misrepresentations in forms filed with the SEC ahead of the merger and a planned initial public offering.
On 14 January, 2025, the SEC charged Elon Musk with failing to file a beneficial ownership report after acquiring more than 5% of Twitter’s outstanding shares. This action permitted Musk to buy Twitter shares at artificially low prices from the “unsuspecting” public who had not priced in Musk’s ownership. Musk thus underpaid for his share purchases by at least $150 million, the SEC alleged.
The SEC did not respond to a request for comment.
“Unprecedented weaponization”
Trump’s order builds on work that his ally, representative. Jim Jordan (R-Ohio) started as chair of the House of Representatives’ Subcommittee on the Weaponization of the Federal Government investigating alleged Biden administration abuses of power. It published several reports about the Biden administration’s “coordination with financial institutions to surveil Americans”, and others that purport to identify widespread instances of government censorship and political persecution.
Trump’s executive order “Ending the Weaponization of the Federal Government” compels the US Attorney General, in consultation with the heads of all departments and agencies to review the activities of “all departments and agencies exercising civil or criminal enforcement authority, including, but not limited to, the Department of Justice, the SEC, and the Federal Trade Commission“. The reviews will cover the last 4 years and seeks identify “instances where a department’s or agency’s conduct appears to have been contrary to the purposes and policies of this order”. The review would be submitted to the president, “with recommendations for appropriate remedial actions”.
“The prior administration and allies throughout the country engaged in an unprecedented, third-world weaponization of prosecutorial power to upend the democratic process,” Trump’s order said, echoing some of Jordan’s findings.
FinCEN in frame
The US Department of the Treasuryʼs Financial Crimes Enforcement Network (FinCEN) is already under attack by Republicans and could be a target of the weaponisation executive order. Jordan’s committee has also targeted FinCEN in its report “Financial surveillance in the United States: How federal law enforcement commandeered financial institutions to spy on Americans”. The report alleges that after the January 6, 2021 “events” (the attack on the Capitol building) FinCEN and the Federal Bureau of Investigation (FBI) met with large US financial institutions to increase surveillance on customer transactions and share information with federal law enforcement. These actions were “outside of normal legal processes”, it says.
According to the report, Federal law enforcement used these materials “to commandeer financial institutions’ databases” and asked them to “conduct sweeping searches of individuals not suspected of committing any crimes”. It says financial services firms were instructed to screen Zelle payments for key words such as “MAGA” and “Trump” as well as for payments to certain bookstores and websites subscriptions.
“As the investigation continues, the Committee and Select Subcommittee will continue to work to understand the extent and status of this widespread financial surveillance while also exploring how Congress could enact legislation to further protect Americans’ civil liberties,” the report says.