SEC Chairman Gary Gensler, who clashed with Wall Street and the crypto industry, to resign

Securities and Exchange Commission Chairman Gary Gensler will step down in January. 20 when President-elect Donald Trump’s administration takes over, the agency said Thursday, ending an ambitious tenure that saw it clash with Wall Street and the crypto industry.

“I thank President Biden for entrusting me with this extraordinary responsibility. The SEC has fulfilled our mission and enforced the law without fear or favor,” Gensler, who was nominated by Democratic President Joe Biden in 2021, said in a statement.

Known for his tough style, Gensler led an ambitious agenda to increase transparency, reduce systemic risks and eliminate conflicts of interest on Wall Street, passing dozens of new rules, some of which have been challenged in court. .

Among his major accomplishments were changes to increase the stability and efficiency of US markets, including speeding up trade settlements and overhauling the $28 trillion Treasury market, as well as a number of rules that boost investor disclosures and corporate governance.

The Baltimore native also successfully enforced rules mandated by Congress imposing SEC oversight on auditors of US-listed Chinese companies, ending a decade-long tussle with Beijing that lawmakers said had put American investors at risk.

On the enforcement front, Gensler’s SEC broke new ground with a multi-year effort focused on Wall Street’s use of text, WhatsApp and other unauthorized channels to discuss business, levying more than $2 billion in fines against dozens of firms , including JP Morgan and Goldman. Sachs.

He also took on the crypto industry, suing Coinbase, Kraken, Binance and others, alleging their failure to register with the agency violated SEC rules, charges the companies deny and are fighting in court.

When it comes to crypto, the courts have largely supported Gensler’s positions.

But his sweeping agenda and uncompromising stance drew strong backlash from Wall Street as well as congressional Republicans and even some Democrats.

The U.S. Chamber of Commerce, the Fund Management Association and other groups sued the conservative-leaning U.S. Fifth Circuit Court of Appeals and elsewhere to strike down at least eight rules, arguing they were unjustified, harmful or outside the authority of the SEC.

Jill Fisch, a law professor at the University of Pennsylvania who specializes in securities regulation, said Gensler would leave with a mixed legacy.

“I think there are clearly some wins, but I would say he came in with a pretty aggressive rulemaking agenda, and most of it either hasn’t or isn’t likely to last.”

The Trump transition

In a major blow to the agency, the Fifth Circuit ruled in June that the SEC did not have the authority to oversee the $27 trillion private funds industry. That loss, and other legal challenges, have slowed the agency’s rulemaking this year and could hamper the agency in the long run, Reuters reported.

Shortly before Gensler’s announcement on Thursday, a federal judge in Texas struck down the SEC’s overhaul of Treasury trader rules passed earlier this year.

Some critics also say that Gensler’s crypto crusade was ill-conceived and hurt the US economy by stifling innovation and pushing crypto companies offshore, criticisms he has refuted. In a speech this month, he argued that history has shown that “strong securities regulation creates confidence in markets and spurs innovation.”

Trump has not said who will replace Gensler, although he is widely expected to name one of the SEC’s current Republican commissioners, Hester Peirce or Mark Uyeda, as acting head of the agency.

Reuters previously reported that Trump’s transition team is considering former SEC officials for the job permanently.

Gensler’s successor is expected to immediately end the crypto crackdown, revise many of Gensler’s rules, withdraw enforcement actions winding their way through the courts, and pursue rule changes focused on promoting capital formation.