On June 2, 2025, the SEC filed a complaint (Complaint) in the U.S. District Court for the District of New Mexico alleging breaches of fiduciary duties and conflicts of interest by an investment advisory firm and its founder. In contrast to past SEC enforcement efforts, the Complaint goes to great lengths to establish the materiality of the alleged conflicts of interest to the harmed investors. In that regard, the Complaint is consistent with the precedent of a recent ruling in the U.S. Court of Appeals for the First Circuit (First Circuit). The Complaint raises questions as to whether the agency will actually apply a materiality threshold when considering conflicts of interest violations under new SEC chair Paul S. Atkins, or has merely adjusted its approach – in one enforcement action – in a nod to the First Circuit ruling. This article summarizes the relevant legal issues in each case; considers the SEC’s stance on a materiality standard for conflicts of interest violations and its reiterated aversion to the use of “may” in disclosures; and presents commentary from legal experts. For coverage of other recent SEC enforcement matters, see “SEC Sanctions Investment Adviser and CCO for Compliance Failures That Allowed Misappropriations” (May 15, 2025); and “SEC Charges Fund Manager With MNPI Failures Related to Consultant” (Mar. 6, 2025).