Securities and Exchange Commission Chair Gary Gensler warned the financial industry that he won’t shy away from going after big firms pushing the limits in areas that are priorities for the agency, including crypto trading, cyber fraud and SPACs.
Wall Street’s top regulator, making his first speech on his approach to enforcement, said he wanted to speed up probes and “hold bad actors accountable,” especially when it comes to headline-grabbing infractions.
“Such high-impact cases are important. They change behavior,” Gensler said Thursday in prepared remarks for an appearance at the Securities Enforcement Forum. “They send a message to the rest of the market, to participants of various sizes, that certain misconduct will not be permitted.”
It's hardly a surprise that the SEC chief is signaling a tough posture on penalizing firms and their executives. On the policy front, he’s already laid out one of the most aggressive agendas in the agency’s 87-year history, targeting new rules for special purpose acquisition companies, hedge funds, online brokerages and other industry players.
The SEC has a reputation for taking months and years to resolve cases, particularly those involving large corporations. Gensler made clear he wants to change that by eliminating “unnecessary process,” that he said is often initiated by defense counsel to bog down settlement negotiations.
“We should focus on bringing matters to resolution swiftly,” he said. “We’ve got precious resources, we need to move the docket, and we will be bringing cases expeditiously.”
Gensler also indicated that the SEC won’t hesitate to use its enforcement powers to halt products it doesn’t like — even before they launch. Some defense lawyers and crypto firms accused the SEC in September of practicing “regulation by enforcement” after the agency threatened to sue Coinbase Global if it went ahead with a plan to let customers earn interest on their crypto deposits.
Without mentioning any particular case, Gensler pushed back on the criticism Thursday, saying what some market participants might refer to as “regulation by enforcement,” he just calls “enforcement.”
