(Bloomberg) -- Paul Atkins is President-elect Donald Trump’s choice to lead the US Securities and Exchange Commission, suggesting four years of relaxed policy and enforcement for crypto firms to hedge funds.
Trump selected Atkins to replace outgoing Chair Gary Gensler, whose ambitious plans focusing on climate-risk disclosures, crypto crackdowns and stock-trading regulations drew resistance from Wall Street. Gensler has said he plans to depart on Jan. 20.
“Paul is a proven leader for common sense regulations. He believes in the promise of robust, innovative capital markets that are responsive to the needs of Investors, & that provide capital to make our Economy the best in the World,” Trump said in the statement posted on Truth Social on Wednesday.
By selecting the former Republican SEC commissioner, Trump is tapping one of the most influential GOP financial regulation insiders to oversee Wall Street. If confirmed, Atkins is expected to focus on whittling away at regulations and levying lower penalties for violations. Critics are already sounding alarms.
He is an “industry cheerleader who, as a commissioner at the SEC from 2002-2008, supported deregulation that contributed to the devastating 2008 crash,” Dennis Kelleher, co-founder of Better Markets, a financial policy think tank, said in a statement.
Atkins has been a strong proponent of digital assets and his selection to head the agency comes after Trump embraced cryptocurrency during his campaign.
Robinhood Markets Inc. legal chief Dan Gallagher said at the firm’s investor day in New York City on Wednesday that Atkins is “the perfect pick for SEC chair.”
Gallagher previously worked for Atkins at the SEC and at Patomak Global Partners, a consulting firm founded by Atkins with major financial industry clients. Patomak has since risen to become one of the most prominent sounding boards for banks, trading firms, fintechs and others seeking guidance on how to influence and respond to Washington’s edicts and investigations.
Atkins’ History
At the SEC and in the private sector, Atkins has been involved in some of the biggest and most contentious policy issues in finance, such as the influence of proxy advisers on corporate boards and the costs of “disclosure overload,” as well as policies to encourage capital formation. He has testified before Congress on ways to restructure the agency’s operations and reduce what some industry participants consider duplicative or overly burdensome regulations.
As an SEC commissioner, Atkins spoke out against high penalties levied on companies, saying they ultimately hurt shareholders. He also called out the SEC’s mandate to not only protect investors but to increase competition and efficiency in the markets. The regulator “must not price those very investors out of our markets through burdensome regulations or eat up the fruits of their investments through nonsensical mandates,” Atkins said in a 2007 speech.
He also criticized parts of the sweeping reforms contained in the Dodd-Frank legislation that was enacted in the wake of the 2008 financial crisis. He testified before a congressional committee about problems with certain big banks getting designated as systemically important financial institutions and the “grab bag” of public company disclosure provisions contained in the law.
Atkins’ leadership would likely be in sharp contrast with Gensler, who rolled out one of the most aggressive SEC agendas in recent memory. Some of Gensler’s marquee rule-makings, however, got stymied by legal challenges.
The SEC under Gensler also levied big fines for regulatory missteps, with record penalties for financial firms using unofficial communication devices to conduct business. Business groups, especially the crypto industry, often complained the SEC under Gensler enacted regulation by enforcement instead of first creating clear rules of the road.
“I think the nomination of Atkins would signal and would be understood as a return to the status quo before Gensler. Back to business as usual for the SEC,” said Alex Platt, a professor at the University of Kansas School of Law.
--With assistance from Paige Smith.
(Updates with additional context throughout)
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