By Liz Dunshee, Reid Hooper and Tejal Shah
As companies gear up for 2026, what happens at the SEC could smooth the path for public capital raising efforts. However, with “lessons learned” from the government-wide shutdown still fresh in our memories – and becoming relevant again as soon as January 30th – planning for potential delays and regulatory curveballs is more important than ever.
Here are seven themes for companies at the pre-IPO and early public stages, based on our experience navigating the 2025 government shutdown, as well as Cooley’s recent webinar, “What to Expect From the SEC Now That the Government Shutdown Has Ended.”
- Agility and preparation are key. Game-plan for alternative scenarios by discussing the requirements, timing and implications with your advisors and board. As we learned from the IPOs that crossed the finish line in October and November (described in this November 2025 case study), it’s critical to quickly assess pros and cons, capitalize on market windows, and pivot if needed.
- The registration process is beginning to normalize (with exceptions). The government shutdown underscored the SEC’s critical role in the public capital raising process – along with the openness of current SEC leadership to ease roadblocks when possible. Coming out of the government shutdown, the SEC prioritized reviewing the 900+ registration statements issuers had submitted while the staff was furloughed. In 2026, assuming the government remains funded, we can expect that initial reviews for registration statements will normalize at 27 to 30 days, although some industry groups are still experiencing longer lag times. If a delayed review is jeopardizing your offering timeline, particularly if your financials may soon go stale, we recommend placing a courtesy call to your examiner to explain your timing issues.
- The SEC chair wants to “make IPOs great again.” SEC Chair Paul Atkins has remarked on his goal to reduce the risks and regulatory burdens associated with being a public company. In the coming year, look for rule proposals to simplify and scale disclosure requirements, which may include an easier IPO on-ramp. We’ll likely also see ongoing efforts to depoliticize shareholder meetings and return the focus to core corporate matters.
Chair Atkins also has spoken about reducing frivolous lawsuits against public companies. To that end, he’s reversed a long-standing SEC policy that had effectively prohibited companies from including mandatory arbitration provisions in their governing documents (but so far, we have not witnessed a big uptake in these provisions, and they remain prohibited for Delaware corporations). - Proxy season is different this year. Due to resource constraints, the SEC’s Division of Corporation Finance announced a new process this year for requests to exclude Rule 14a-8 shareholder proposals from company proxy statements. This year, for almost all scenarios, the staff will not provide a substantive response to no-action requests. Companies must notify the staff and proponent of their intent to exclude and must have a reasonable basis for doing so. Companies have the option to request a “no-objections” response from the staff – but unlike historical no-action responses, these no-objections responses are not based on a substantive review. This process shifts the calculus for deciding how to address shareholder proposals, and companies must weigh reputational risk and potential litigation when deciding whether to exclude proposals. See our November 20 alert and our December 3 alert. (And if you’re aiming to make your proxy season as simple as possible, make sure to check out Cooley D+O – a complimentary service for Cooley clients.)
- Back to basics for SEC enforcement. With the director of the SEC’s Enforcement Division getting into her seat only six weeks or so before the government shutdown, it is not too surprising that enforcement actions were relatively sparse in 2025. For public companies, we expect this to largely continue in 2026, as current SEC leadership is more likely to seek individual accountability than impose fines on public companies that would ultimately hurt public stockholders.
We are already seeing the SEC pursue private companies and founders for alleged misrepresentations in fundraisings – such as inflated financials or exaggerated AI claims. Additionally, the SEC often seeks public company director-and-officer bars as part of negotiated settlements – even if the person isn’t a public company officer at the time. In practice for companies, this means accurate disclosure still matters. Resist the temptation to overstate customer traction or AI use – claims like “we have secured major customer contracts” can become enforcement fodder down the road if untrue.
If you do discover a compliance issue, make sure to seek prompt legal advice. Companies that conduct a thorough independent review and take prompt remedial action are better positioned if regulators come calling. See this post from Cooley’s “Securities Litigation + Enforcement” for more enforcement-related predictions. - Enforcement settlements may have collateral consequences. The SEC’s focus on anti-fraud enforcement makes it more important than ever to understand the collateral consequences of fraud allegations and settlements – whether against directors and officers or the company itself. As Cooley’s Tejal Shah explains in this October 2025 blog post, certain fraud-related decrees and settlements can make it much harder to raise capital in private and public offerings in the future. The Commission will consider waivers of these disqualifications based on recommendations from the SEC’s Division of Corporation Finance, which is important to keep in mind when negotiating any settlement with the Enforcement Division. Under Chair Atkins, the SEC has returned to a more straightforward approach to simultaneously considering enforcement action settlements and corresponding waivers.
- Foreign companies are in the crosshairs. While the SEC’s current priorities might allow US public companies to enjoy less burdensome regulations, compliance and market integrity are still important. Recent actions affecting foreign companies make that especially clear. In addition to publishing a concept release last summer that contemplates updating eligibility and other requirements for foreign private issuers, the SEC established a cross-border task force in September to investigate securities violations of foreign companies.
Since then, the SEC has already issued 10-day trading suspensions for at least nine Asia-based issuers, alleging they used social media to artificially inflate stock prices. When Nasdaq’s recent rule changes are layered in, the result for many of these companies is that they’ll never trade again on a US exchange. That’s no accident – the SEC is coordinating closely with Nasdaq. In December, the SEC also approved a Nasdaq rule change that expands the exchange’s authority to deny initial listing applications based on the risk of price manipulation by third parties, with the company’s location being one of the factors that the exchange will consider in exercising this discretion.
Additionally, as explained in this December 2025 blog post from Cooley’s Broc Romanek, the “Holding Foreign Insiders Accountable Act” was recently signed into law. This law will subject directors and officers of foreign private issuers to reporting requirements for their stock transactions as soon as March 18th.
In 2026, we expect ongoing scrutiny of foreign companies’ disclosures in both public and private offerings, and we would not be surprised to see a proposal to amend the FPI eligibility rules and accommodations.
Whether you’re drafting your first S-1 or managing life as a newly public company, staying informed as these priorities continue to evolve will help you avoid costly missteps. We’ll continue to monitor regulatory shifts throughout the year and are always working closely with clients to navigate them. We’re also continuing to add helpful resources for pre-public and newly public companies on IPO GO.
