According to the various law profs who make up the “Shadow SEC,” it isn’t just the Division of Enforcement where things appear to be moving a little slowly. Citing an August 2025 OIG report on Corp Fin’s disclosure review program and research from Olga Osvyatsky, a recent blog from the Shadow SEC says that there’s been an alarming decline in the number of comment letters and points to this year’s staff reductions as the cause:

Data document that there has been a dramatic, and worrisome, decline in 2025 of staff comment letters and that there are longer delays in the letters. We note here that the SEC historically has managed its mandated Disclosure Release Program with fewer than 300 employees; this task is challenged by the report of Chair Atkins that since the beginning of 2025 there has been about a 10% reduction in the disclosure review staff and that he “did not rule out further reductions.”

SEC comments are valued by the market and contain new information that is not already priced into stock prices. As observed, we are witnessing a sharp decline in the number of SEC comment letters released on EDGAR between January and August 2025.

The SEC has lost 27 of its 299 disclosure review employees since February according to an August 26 Office of Inspector General Report. “When experienced regulators depart in large numbers, the SEC will have fewer employees with a deep understanding of securities regulation and agency practices. With these experienced employees leaving so abruptly, the remaining staff will find it difficult to take overactive cases or begin new investigations both due to knowledge gap and the increased workload.”

Olga’s a little more circumspect when it comes to attributing the decline in comment letters to staff reductions, noting that it’s “difficult to attribute the decline in released comment letters to a specific cause because both the total number of reviews conducted and the SEC staff’s materiality judgments about whether to issue comments are unobservable.”

On the other hand, Olga says the delay in the release of comment letters is very evident. Olga points out that in the past, the Staff usually adhered to its internal guidance calling for those letters to be released within 20 business days following the issuance of a closing letter. That dissemination lag grew from 28 days in April 2025 to 100 days in August 2025.

Of course, the government shutdown isn’t going to improve this situation one bit. According to this Government Executive article, the SEC’s Shutdown Operations Plan calls for over 90% of the agency’s employees to be furloughed during a government shutdown.

– John Jenkins