Biden has reportedly made his choice for top regulator, tapping an Obama-era enforcer to run the SEC.
Former Goldman Sachs banker Gary Gensler has been named as President-elect Joe Biden’s pick to chair the US Securities and Exchange Commission, unconfirmed reports said Tuesday.
Reuters reported that his nomination is expected "in coming days," according to two sources close to the matter. Gensler was already in the frame after being chosen to lead Biden's transition team on financial services soon after November’s election.
From 2009 to 2014, Gensler was chair of the Commodity Futures Trading Commission (CFTC) and is likely to raise the specter of tougher oversight for financial services compared with four years under Republican lawmakers.
If confirmed, he will replace President Trump’s selection Jay Clayton, who has been widely criticized by Democrats for being too closely aligned to Wall Street interests.
Nicolas Morgan, litigation partner at Paul Hasting law firm, and a former senior SEC trial counsel, said Gensler’s appointment is a "knowledgeable and experienced" choice. "As Chair of the CFTC during the Obama administration, Gensler earned a reputation as an aggressive regulator following the financial crises, particularly in his pursuit of the LIBOR manipulation cases.”
At the CFTC, Gensler introduced sweeping new swaps trading rules and pursued the big investment banks during the interbank lending scandal.
The passing of the Dodd-Frank act in response to the global financial crisis gave the commission vastly more oversight of previously unregulated swap derivatives that led to the $180 billion bailout of insurance giant AIG.
Morgan at Paul Hastings said that Biden’s choice of top regulator departs from previous appointees. “He does not have the criminal prosecution background that Mary Jo White had, which may suggest a more career regulator approach than a 'tough on crime' approach,” the partner based in Hastings' Los Angeles office said.
Neither Biden’s camp nor Gensler has responded to Tuesday’s news report.
Policy analysts broadly agree that his appointment will put climate-related disclosure risks for corporations and financial institutions at the top of Gensler’s agenda. They also see it as a chance to review political spending and restore investor protections that many see as being eroded on Clayton’s watch.
Gensler is a professor at MIT Sloan School of Management and former chief financial officer for the presidential campaign of Hillary Clinton.
He will take over an agency at the forefront of how the US government proceeds on areas such as the role for cryptocurrencies and blockchain, among other concerns breaking new ground.
Last week, Biden named Rhode Island Governor Gina Raimondo as Commerce Secretary in another defining role that will set US trade policy at home and abroad, most notably the new administration's approach to China.
Raimondo, a second-term governor in Rhode Island, is a former venture capitalist who co-founded Point Judith Capital, an investor in communications, health care and technology companies. She has degrees from Harvard and Yale Law School and is a former Rhodes scholar.