Gary Gensler, Biden’s choice to lead the SEC, has a reputation for being a tough regulator

By appointing Gary Gensler as chairman of the Securities and Exchange Commission, President-elect Joe Biden is likely to appeal to progressives, who are pushing for more banking supervision after four years of deregulation under President Donald Trump in the SEC, Jay Clayton, who resigned in December.

“Gensler is a great choice to lead the agency,” said Barbara Roper, director of investor protection at the Consumer Federation of America. “He knows the markets like anyone on Wall Street, so he can’t be intimidated. He’s a seasoned regulator who knows how to get things done.”

Gensler spent 18 years with Goldman Sachs before joining the Treasury Department under the Clinton administration. After a stint with the Commodity Futures Trading Commission – where he built a reputation as a tough regulator – he served as an economic advisor for Hillary Clinton’s 2012 and 2016 presidential offers, and since the 2020 election he has been leading the Biden Financial Regulatory Team. group.

At the CFTC, “Gary has proven himself to be relentless and effective in enacting and enforcing tough rules. He worked very quickly, very thoughtfully and very aggressively, ”said Tyler Gellasch, executive director of investor advocacy group Healthy Markets.

“Gary’s main selling point is his ability to reduce noise and keep moving. He was also able to defend his rules, ”Gellasch said.

The Democratic Party’s left flank pushed back against potential choices from Cabinet and agencies with Wall Street backgrounds, preferring candidates from the ranks of universities and left-wing think tanks. But observers say Gensler’s effectiveness in pursuing and successfully implementing regulatory reforms in the wake of the financial crisis was due, in large part, to his deep first-hand knowledge of the inner workings of the industry.

Financial policy experts believe his predecessor’s workflow will likely be high on Gensler’s to-do list.

“I expect the SEC’s top priority in the Biden administration to be investor protection first and foremost,” said Karen Shaw Petrou, co-founder of Federal Financial Analytics, a consulting and investment company. financial policy analysis. These actions would likely include the reinstatement of an Obama-era rule requiring brokers to work in the best interests of their clients, she added. “These could help retail investors by reducing conflicts of interest.”

Progressives are pushing for a new financial regulatory regime that will push companies to incorporate worker and shareholder fairness, racial justice and environmental issues into their disclosures. “There is a pent-up demand to modernize the disclosures of our public companies to address concerns about environmental, social and governance issues, which I think will make this an early priority,” Roper said.

“I think a lot of the agency’s agenda will focus on what I would call core corporate responsibility,” Gellasch said, adding that the SEC needs to “make sure it brings back a big part of the private equity and venture capital and private debt markets a regulated space. “

The Biden administration will likely look to Gensler, who teaches a blockchain technology course at MIT, to craft regulatory guidance around the emerging field of cryptocurrency.

Supporters of financial reform also want to force companies to disclose more of their PAC donations – a topic that has received renewed interest in recent days, as a large chunk of U.S. companies have pledged to re-examine their political spending in the wake of the Capitol Riot.

“The SEC sets the rules for what information companies disclose and what investors and the public can do with that information,” Gellasch said.