Wall Street has a new top man. And Elizabeth Warren is a big fan of his

Wall Street has a new top man. And Elizabeth Warren is a big fan of his

by

During his time as Obama’s regulator, Gensler made few friends and many enemies. As chairman of the Commodity Futures Trading Commission, Gensler helped draft the Dodd-Frank Financial Reform Act that loudly opposed the industry. Gensler applied Dodd-Frank faster than other regulators.

Although Gensler is a former Goldman Sachs banker, his nomination sends a clear signal that Biden intends to take a tougher stance on Wall Street than not just President Trump, but perhaps Obama as well.

“Gensler was the toughest regulator under Obama. That will now be the norm in the Biden government,” former Democratic Congressman Barney Frank told CNN Business.

Frank, who co-authored the 2010 Financial Reform Act, says Gensler’s nomination is a ‘very good sign’.

“It will relax people who may have been concerned that the application of our bill would not be strong enough,” Frank said. He is now a director at Signature Bank.

A former Goldman banker backed by Warren

Warren, a fierce critic of big banks, also sounds very pleased with the Gensler choice.

“He is a stubborn regulator who has risen up against the titans of the industry to curb their risky behavior,” the Massachusetts Democrat said in a tweet Monday. “He will be an excellent SEC chairman during this economic crisis.”

Not only did Biden appoint Gensler to lead the SEC, but he also announced Monday the appointment of Warren ally Rohit Chopra to lead the Bureau of Financial Consumer Protection.

Biden fired an early warning on Wall Street in November when he tapped Gensler to lead an agency team that formed the Federal Reserve, SEC and FDIC.

Dennis Kelleher, a vocalist for Wall Street reform who also works on the Biden agency team, praised the Gensler choice.

Wells Fargo apparently can not escape his difficult past

“Gary is a deeply experienced security market expert,” Better Markets CEO Kelleher said in an interview. “He will be a smart, strategic and daring leader who will bring the SEC back to the gold standard of investor protection.”

Before joining the government, Gensler worked for almost two decades. Goldman Sachs (GS), where he was an M&A partner, led the bank’s media group and co-led the financial team.

“He’s the unique exception to the rule of former Wall Streeters who deliver for Wall Street, not Main Street,” Kelleher said.

Frank, the former Congressman, said it was no coincidence.

“Gary Gensler was effective in part because he knew the business so well from his time at Goldman,” Frank said. “It should be a rebuttal to friends on the left who think you should have no one working in the industry.”

Will Trump judges block Biden’s ‘markman’?

Neither the American Bankers Association nor the Bank Policy Institute responded to requests for comment on Gensler’s nomination.

Stephen Cohen, a defense attorney at Sidley Austin, said Wall Street supports a much stricter application.

“The industry recognizes its reputation. It will want to prove that the SEC is tough on Wall Street – not just a market regulator, but also a policeman,” he said.

Cohen, a former SEC official who worked with Gensler during the Obama administration, called Gensler “extremely smart and confident,” but warned he might face legal obstacles.

“The courts are much more conservative than four years ago,” Cohen said, referring to Trump’s appointment of numerous judges acting before the business world. “There will be more successful challenges to aggressive enforcement and domination.”

New rule could make it harder for banks to cut ties with oil and coal companies
Gensler was also known as a demanding boss – so demanding that the staff eventually formed a union.
When he took over the CFTC, there were calls to merge the agency with the SEC. Not only did Gensler reject the efforts, but he also succeeded in expanding the agency’s jurisdiction.

If confirmed, Gensler is expected to focus strongly on investor protection. But he will also be asked to address the rise of cryptocurrency and the worsening climate crisis.

Climate activists want Gensler to draw up mandatory rules on publicizing climate change in the industry. This is a step that parts of the US business world, especially the fossil fuel industry, are likely to oppose.

“Mr Gensler will enter his new position with a clear mandate and clear expectation to act on the climate crisis,” Mindy Lubber, CEO of the sustainable non-profit enterprise Ceres, said in a statement.

Stricter than Trump – and Obama?

Clearly, Gensler represents a sharp shift from the Trump era.

In 2017, Trump tapped Jay Clayton, an elite lawyer with a long history of defending major banks, to lead the SEC. According to Clayton, who retired last month, the SEC received orders for more than $ 14 billion and raised a record $ 3.5 billion, according to the agency.

However, Clayton also led a “modernization effort” that critics say has often been tipped against investor protection.

The Clayton-led SEC, for example, has introduced rules that have made it more difficult for shareholders to submit proposals at annual meetings and to obtain independent advice from proxy advisers.
It's easy for big business to drop the IDP now. Tax increases will be the right test
Last month, the SEC’s own investor advocate criticized the commission’s “worrying recent actions” and called on the agency to “selectively relinquish its regulatory stance by setting higher barriers to independent shareholder oversight of the management of public companies. “

“While typically characterized as attempts to ‘modernize’ or ‘streamline’ regulations, it has often resulted in reduced investor protection,” Rick Fleming, SEC Investor Advocate, wrote in a report.

Under Obama, the SEC has been criticized for not being tough enough after the 2008 financial crisis.

“The SEC’s record was pretty disappointing,” said Better Markets CEO Kelleher.

Mary Schapiro, Obama’s first SEC chairman, elected Robert Khuzami, a former federal prosecutor who later became Deutsche Bank’s chief executive for America, to head the agency’s enforcement department. Obama’s second SEC chair was Mary Jo White, a former federal prosecutor who later became a defense attorney on Wall Street.

Kelleher expressed the hope that Gensler would not repeat the “fatal flaws” of the SEC from the Obama era by appointing Wall Street attorneys to key positions in the agency.

“It’s going to be the big story,” he said.

.Source