The Senate voted 53-45 Wednesday to confirm Gary Gensler as Securities and Exchange Commission chairman, potentially opening the door to increased political and climate risk disclosures from companies.
Gensler will lead the agency amid growing calls for more public company disclosures from both Democrats and corporate shareholders. With his arrival, Democrats will have a majority on the commission.
Mandated corporate disclosure of political spending and climate risk merits a closer look given strong investor interest, Gensler said during his March 2 confirmation hearing.
Senate Banking ranking member Patrick J. Toomey, R-Pa., referred to Gensler's hearing comments when Toomey said on the floor Tuesday that he would vote against the nominee because it could lead to requirements that companies disclose information on global warming, political contributions and equity.
"Based on his record as a regulator in the past, I am concerned that he would use the SEC to advance an agenda not in its purview," Toomey said. Securities law and securities regulation are not the appropriate vehicle to address global warming, political spending or racial equality, he said.
The mission of the SEC is to protect investors, facilitate capital formation, and maintain fair and orderly capital markets, Toomey said, adding that the economic recovery can be stymied if regulators propose inappropriate burdens.
Senate Banking Chairman Sherrod Brown, D-Ohio, said on the floor Tuesday that Gensler's experience at the Commodity Futures Trading Commission shows he's willing to be tough on enforcement. "Mr. Gensler has shown he has the guts to take on bad actors no matter how big and how powerful they are, and he'll hold them accountable."
Gensler was CFTC chairman for more than four years during the Obama administration.
Brown said the Senate Banking Committee has concentrated on Wall Street in the past. "Those days are behind us," he said, adding that it would look out for small investors under his chairmanship. "We can have a market that works for everyone," he said. "Mr. Gensler shares that goal."
Gensler’s knowledge of cryptocurrency and distributed ledger technology won him the support of Republican senators from states that are friendly to the cryptocurrency industry. He taught classes and did research on blockchain technology, digital currencies and their intersection with public policy as a professor at MIT Sloan School of Management.
Sen. Cynthia Lummis, R-Wyo., said Gensler’s commitment to financial innovation outweighed her concerns about his views on climate disclosure. Her state has carved out a niche as a haven for the cryptocurrency industry. Wyoming last year issued the first cryptocurrency banking charter to Kraken Financial.
“As China and several European nations continue to make strides in financial innovation, the United States must not only keep pace, but pull ahead with advancements in distributed ledgers and digital assets,” she told CQ Roll Call in a statement.
Sen. Mike Rounds, R-S.D., and Lummis were the only Republicans on the Senate Banking Committee to vote to advance Gensler’s nomination to the floor. Lummis, along with Sens. Charles E. Grassley of Iowa and Susan Collins of Maine, were the Republicans voting to confirm on the floor. Rounds didn't vote.
The South Dakota Division of Banking updated its rules for trust companies registered in the state to accommodate firms that handle digital assets. Silicon Valley cryptocurrency startups BitGo and Anchorage hold trust company charters through the state.
Gensler’s career has intersected with some of the biggest financial policy overhauls of the last two decades.
As chairman of the CFTC, he led the agency’s implementation of the 2010 Dodd-Frank Act. The law increased regulatory oversight of the financial sector, including derivatives markets, following the 2007-2008 mortgage and economic crisis.
Gensler was also involved in crafting of the 2002 Sarbanes-Oxley Act as a senior adviser to former Senate Banking Chairman Paul Sarbanes, D-Md. Congress passed the law in the wake of the Enron and WorldCom accounting scandals to establish a regulatory framework for corporate audits and the audit industry.
Gensler spent his early career on Wall Street at Goldman Sachs Group Inc., where he worked for 18 years on mergers and acquisitions, and later trading and finance.