House Financial Services Committee Examines Necessity for SEC Reform in Light of Issues Surrounding Gensler’s Leadership

Chair Gary Gensler of the United States Securities and Exchange Commission (SEC) is under heightened scrutiny regarding his management of the federal agency following a hearing conducted by the U.S. House Committee on Financial Services (HCFS) on Monday. The committee examined potential reforms for the SEC, addressing worries about the agency’s recent actions.

Representative French Hill Criticizes Gensler’s Leadership, Advocates for SEC Reform

The committee’s memorandum indicates that Gensler’s leadership has raised “significant concerns” among its members, pointing to the commission’s “rapid push to propose and finalize numerous new rules” along with inadequate comment periods that would typically allow stakeholders to offer meaningful feedback on proposed regulations in accordance with the Administrative Procedures Act.

HCFS Vice Chairman Representative French Hill (R-LA) condemned the commission’s regulation-by-enforcement strategy, highlighting its detrimental financial effects on the American populace and the pressing need for SEC reform.

“Due to that gross misuse of power, the commission is obligated to cover the legal expenses – which means that our constituents’ tax dollars are now being utilized to fund the SEC’s overreach and shortcomings,” Hill remarked.

“Whether it’s in compliance with the Administrative Procedures Act or not, or in providing clear guidelines for the digital asset ecosystem, it is evident that the SEC under Gary Gensler consistently and overtly exceeds its statutory authority,” he added.

Hill’s remarks emphasize the critical necessity for SEC reform to tackle these concerns and ensure the agency functions within its legal limits.

Whether it’s “Debtbox” or “DropBox”, @GaryGensler and the @SECGov are blatantly and repeatedly overstepping their statutory authority — and your tax dollars are funding their failures in court. pic.twitter.com/eKnttmkSxc

— French Hill (@RepFrenchHill) March 20, 2024

In the meantime, David Burton, a Senior Fellow in Economic Policy at The Heritage Foundation, criticized the federal agency’s emphasis on social justice initiatives, such as climate disclosures and diversity, equity, and inclusion, rather than focusing on “serious issues” related to its “core mission.”

“The SEC has been managed extremely poorly for quite some time,” Burton stated. “Its organizational structure is cumbersome and inconsistent with effective management practices. It ranks among the most management-heavy and bureaucratic agencies in government.

Representative Waters Takes a Contrarian Stance

HCFS Ranking Member Maxine Waters countered the committee’s concerns, asserting the necessity of SEC reform to enhance transparency in unregulated private securities markets. She also supported more extensive climate disclosures.

“For the record, our SEC serves as our protector, safeguarding investors,” Waters remarked.

#HappeningNow: Subcmte RM @BradSherman leads Democrats as the Subcmte on Capital Markets holds a hearing entitled “SEC Overreach: Examining the Need for Reform.”

: https://t.co/GtfGWh1joY pic.twitter.com/V4B5Kb9ANT

— U.S. House Committee on Financial Services (@FSCDems) March 20, 2024

Likewise, Alexandra Thornton, the Senior Director for Financial Regulation for Inclusive Economy at the Center for American Progress, asserted that “opponents of the SEC” are “misusing reasonable administrative process protections and transforming them into years-long hurdles for agency actions.”

“Regrettably, a few relatively recent court rulings have rendered this process significantly more burdensome for the agency and placed crucial rules at risk,” Thornton continued, claiming these external pressures were “burdening” the federal agency from effectively addressing concerns.

The SEC’s Regulatory Strategy Faces Backlash

Monday’s hearing by the House Committee on Financial Services occurs amid a surge of criticism regarding Gensler’s leadership of the SEC, particularly following Judge Robert Shelby’s rebuke of the commission’s management of the flawed case against Debt Box, labeling it a “gross abuse of power.”

Shelby has since dismissed the SEC’s litigation against the cryptocurrency firm without prejudice.

Cryptonews.com has contacted the SEC for a response.

The post House Committee on Financial Services Explores Need for SEC Reform Amid Concerns Over Gensler’s Leadership appeared first on Cryptonews.