In a recent turn of events, some House Democrats and Biden administration officials have raised concerns and expressed their dissatisfaction with Securities and Exchange Commission (SEC) Chairman Gary Gensler’s regulatory approach. Gensler, who has been a frequent target of Republican attacks, has faced criticism for his perceived “outsized influence” in rulemaking and enforcement.
One of the notable critics of Gensler is Representative Ritchie Torres, a Democrat from New York, who has been increasingly critical of the SEC Chairman’s stance on the cryptocurrency industry. Torres, a supporter of the industry, has raised concerns over Gensler’s attempt to exercise greater authority by implementing more rules for investment, particularly following the collapse of cryptocurrency exchange FTX last year. In a House Financial Services Committee hearing, Torres questioned Gensler’s authority over crypto and highlighted the importance of not adopting regulations based on outdated circumstances.
Another Democrat, Representative Steven Horsford from Nevada, has also voiced concerns about Gensler’s rulemaking and its potential negative impact on small businesses. Horsford emphasized the need for regulations to consider the changing dynamics of the economy and highlighted the consequences they can have on minority communities. He called on Gensler to adopt a less stringent approach and to target industries responsibly.
Representative Wiley Nickel from North Carolina underscored the importance of congressional involvement in regulator’s decisions, including those of Gensler and the SEC. Nickel expressed concerns about Gensler’s regulation by enforcement and urged for a more balanced approach that takes into account industry needs. Notably, some Republicans have also criticized proposed rule changes by the SEC, claiming they could have a significant impact on bank balance sheets.
Furthermore, earlier this year, a bill called the SEC Stabilization Act was introduced by House Republicans, aiming to remove Gensler from his post. The bill proposes restructuring the SEC to redistribute power from the chair to other commissioners, adding a sixth commissioner to the body, and creating an executive director position for overseeing day-to-day operations.
The concerns raised by House Democrats and Biden administration officials highlight a growing rift between some members of the Democratic Party and Gensler’s regulatory approach. While Gensler’s efforts to increase regulation on certain financial industries have drawn praise from some quarters, others argue that a more balanced and industry-responsive approach is necessary. It remains to be seen how these concerns will influence the SEC’s future actions and the ongoing debate over financial regulation.
In response to the criticism, Gensler’s office has been contacted for comment, but no statement has been released at the time of writing.
