(RepublicanInformer.com)- In a narrow vote, the U.S. Senate confirmed Gary Gensler as the new chairman of the Securities and Exchange Commission.
Most Republicans voted against confirming Gensler, who could end up taking on what many think is an “ambitious financial regulatory agenda under President Joe Biden,” as MarketWatch reported. The final vote was 53-45.
Gensler began his financial career working at Goldman Sachs as a banker. He’s one of the few veterans of Wall Street who has engendered himself to liberals. His past experience serving as the Commodity Futures Trading Commission’s chairman helped his cause.
There, he played a role in the crafting of the Dodd-Frank reform legislation. He also implemented new rules that regulate the derivatives market.
Some of the new initiatives that Gensler could be tasked with implementing are requiring public companies to disclose risks they pose to climate change,, as well as other workforce management and data that’s related to social, governance and environmental issues.
Allison Herran Lee has been serving as the acting chairwoman of the SEC since December. Under her, the SEC asked the public to provide input on new disclosure requirements.
The GOP in general was opposed to Gensler. They believe his willingness to lead the SEC in company disclosure regulation could lead to an overstep from the department on its authority.
In a statement released Tuesday, Pennsylvania Senator Pat Toomey, who is the ranking member of the GOP on the Senate Banking Committee, said:
“I’m concerned he will cause the SEC to use its regulatory powers to advance a liberal social agenda focused on issues such as global warming, political spending disclosures, and racial inequality and diversity. Securities laws are not the appropriate vehicle to address these topics.”
Ultra-progressives may have to wait for a while for Gensler to carry out their agenda, though. The SEC is already dealing with the fallout from the short squeeze on GameStop, as well as the failure of Archegos Capital Management, a hedge fund.
The SEC also is likely to look at the dramatic increase in private companies deciding to go public through what’s known as special purpose acquisition companies.
The Biden administration and other Democrats in Congress have already asked the SEC to re-examine various policies that led to the saga surrounding GameStop stock, where an underperforming company all of a sudden had its stock price shoot up by many multiples due to fervor from a stock trading forum on Reddit.
The downfall of Archegos may also encourage the new SEC chair to look at requiring institutional investors to disclose their short positions in any stocks. They could also require these investors to disclose any derivative positions they have that would mimic ownership in stock.
In a note to clients this week, the chief Washington policy strategist at Stifel, Brian Gardner, wrote:
“The surge in the popularity of Special Purpose Acquisition Companies has already attracted the SEC’s attention, and the SEC’s interest in SPACs is likely to grow during Mr. Gensler’s term. We expect the SEC will consider changes to SPAC disclosures that more clearly spell out investors’ rights and will push SPACs to align the interests of founders with the interests of investors.”
