Gensler To Wall Street: Prepare For The “Everything” Crackdown

Regardless of what one thinks of SEC Chair Gary Gensler, he certainly seems to be bringing more to the table in terms of regulations than his predecessor, Jay Clayton.

In fact, Gensler is readying an “everything crackdown”, according to a new report from Bloomberg.

Gensler has already proposed 49 separate changes for his staff to consider implementing, the report says, calling it “one of the most ambitious agendas in the SEC’s 87-year history”. At the same time, he has kept an aggressive stance on ongoing enforcement actions. 

Gensler even said in a recent interview that he thinks about a famous Martin Luther King, Jr. speech about the “fierce urgency of now”.

He has set up about 50 teams involving about 200 people just to write rule proposals. Each team has staff from the general counsel’s office and economists to help examine costs and benefits of new proposals. 

Everyone from SEC veterans to hedge funds – and even some supporters of Gensler’s agenda – are worried that the pace he is setting could wind up being counterintuitive. 

Frank Kelly, a former agency official who now runs Fulcrum Macro Advisors, told Bloomberg: “You have to think it will be quite a challenge for the SEC staff to achieve.”

Gensler has been urged to lighten his load on account of policies he is advocating for potentially taking years to finalize.

For Gensler, it appears that all of his proposals share a spot at the top of his list.  “Don’t ask me about my three daughters and which one I spend more time with,” he told Bloomberg.

There is also a fair amount of push and pull from the political world, with both sides of the aisle sharing a keen interest on pending rules. 

Two current issues that are in the midst of regluation are cleaning up market plumbing as a response to the GameStop fiasco and instituting the nation’s first rules on regulating crypto.

But Gensler won’t back down. Several people who worked with him said “he won’t pare back his ambitions or shy away from a fight.”

Those willing to discuss him with Bloomberg called him a “relentless and skilled manipulator of the bureaucracy who cares little about making enemies or exhausting staff members”. 

Micah Green, a lobbyist at law firm Steptoe & Johnson, said: “If anyone underestimates his ability to get things done, they do so at their own peril.” 

Recall, before his appointment, we referred to Gensler as “The Sheriff” and made note that his agenda as SEC chair could be far more “hands on” than that of Jay Clayton. We wrote about Gensler’s nomination in mid-January. 

“His arrival will likely be a stark difference from the last 4 years of Jay Clayton, as Gensler’s resume includes going to war with major financial titans when he was head of the Commodity Futures Trading Commission – and winning,” we wrote.

Financial lobbyists sometimes simply called him “the enemy” during the 2010 Dodd-Frank Act battle. 

Justin Slaughter, a consultant at Mercury Strategies, said at the time: “The sheriff is coming to the preeminent financial regulator in the world. It means regulation and enforcement are about to get much tougher.”

You can read Bloomberg’s full writeup on Gensler’s agenda here.