Gary Gensler was confirmed by the Senate in a 53 to 45 vote on Wednesday, April 14th to Chair the Securities and Exchange Commission (‘SEC”). Previously serving as the Chair of the Commodity Futures Trading Commission under President Obama from 2009 to 2014, and serving under President Clinton in a variety of Treasury-related roles, Gensler has had an illustrious career in not only public service, but also in academia, having a position on the MIT Sloan School of Management as a Professor of the Practice, Global Economics and Management.
Known for his expertise and research on blockchain technology, digital currencies, and financial technology, he is expected to likely look into these topics’ interaction with the market and the American economy at large. Along with Gregory Baer, Gensler is co-author of “The Great Mutual Fund Trap,” a 2002 book asserting, among other things, that actively managed mutual funds with higher fees generally perform worse than “passive” low-fee index funds. Shortly before his confirmation as chair of the SEC, Gensler has made promises to focus corporate America’s relationship on both its environmental and social responsibilities in line with President Biden’s declaration that urgent action must be undertaken to tackle a “climate emergency.” Additionally, in response to the recent Gamestop trading mania that occurred in January, Gensler will bring his extensive experience from his time in both academia and on Wall Street to navigate a veritable regulatory minefield requiring a cohesive, unified approach which the financial industry has signaled would be a welcome shift from the last four years.
However, Democrats and Republicans alike have questioned whether the installment of Mr. Gensler as chair of the SEC will represent a drastic shift in SEC enforcement over previous years. Signaling that he would limit disclosure requirements to “material” matters to investors, Gensler noted that “It’s the investor community that gets to decide what is material,” in a March 2021 hearing before the Senate Banking, Housing, and Urban Affairs Committee.
Still others remain optimistic. In a March 8 letter to the Senate Committee on Banking, Housing, and Urban Affairs from Neil Bradley—Executive Vice President and Chief Policy Officer and Head of Strategic Advocacy at the U.S. Chamber of Commerce— Bradley wrote “[Gensler’s] experience will be critical to ensuring businesses, especially small and emerging growth companies, are able to access needed capital so that they can grow and help enable a robust economic economy.” It remains to be seen what Gensler’s time at the SEC has in store for him, but it is certain to include cutting-edge issues that Gensler should be well-equipped to handle.