SEC Investigates Fraud Claims in Private Credit Markets

The Securities and Exchange Commission (SEC) is investigating allegations of fraud in private credit markets, the agency’s chairman said Monday (May 4).

Speaking at the Milken Institute’s Global Conference 2026, SEC Chairman Paul S. Atkins said: “There’s been allegations of fraud, and obviously I can’t talk about any specific cases, but we are investigating that as well.”

Atkins added that it’s good that private markets exist because small and medium-sized businesses would otherwise have difficulty accessing credit. Capital rules keep banks from lending to many of these firms, he said.

“So, luckily, the private markets are there to step in and provide the capital because we do have robust private capital markets here in the United States on both the equity side and the credit side,” Atkins said. “So, our economy would not be anywhere near what it is now, especially for small and medium-sized businesses which provide most of the job creation on our economy. So, thank goodness for that.”

Atkins said the Financial Stability Oversight Council, which includes the SEC, the Treasury Department and other financial regulators, is monitoring private credit markets.

“We don’t see this as a systemic risk, at least at the current time, but we’re monitoring that and staying apprised of it,” Atkins said.

It was reported Sunday (May 3) that Federal Reserve Governor Michael Barr became the latest official warning of concerns related to private credit.

Barr told Bloomberg News that stress in the market could lead to “psychological contagion” and thus set off a wider credit crunch.

He said that although direct connections between banks and private credit do not yet seem “super worrisome,” there were other areas of concern, including the insurance industry’s ties to private lenders.

On April 28, it was reported that JPMorganChase CEO Jamie Dimon warned of the possibility of a worse-than-anticipated credit market turndown. Dimon said that was especially true for the private credit space, where the sheer number of companies means not all of them will do well if the market falls.

The Treasury Department said April 1 that it was going to meet with insurance regulators to discuss the private credit industry. The department said those meetings would kick off in May and would involve domestic and international insurance regulators.