The
Securities and Exchange Commission (SEC) is abandoning the hard-line
enforcement approach that defined the Biden years, with new Chairman Paul
Atkins promising to warn businesses about technical violations before
launching major actions against them.
Atkins Signals Softer SEC
Approach as Trump Administration Rolls Back Biden-Era Enforcement
Atkins told
the Financial Times that the agency will focus on serious
fraudsters while giving companies more notice about potential problems.
The shift represents a complete reversal from his predecessor Gary
Gensler, who built a reputation for aggressive enforcement and hefty fines
across Wall Street.
“If you
lie, cheat or steal your investors and steal their money like
Bernie Madoff, we’ll leave you naked, homeless and without wheels,”
Atkins said, quoting a sign from his former boss’s office. But
for technical violations, he added, “You can’t just suddenly come and
bash down their door.”
Billions in Fines
Face Fresh Scrutiny
The new
approach puts billions
of dollars in penalties under question. Gensler’s SEC collected
massive fines from banks and brokers for record-keeping violations, which
Atkins now calls inappropriate for industry-wide problems.
Atkins
criticized the formulaic nature of those penalties, saying they “devolved
to where it became a formula: what’s your revenue, here’s your
invoice.” Instead, he wants regulators to act more like
teachers warning students to get their act together.
The chairman
specifically targeted Gensler’s
enforcement-heavy approach, saying it lacked predictability and due
process. “It would shoot first and then ask questions later,” he
said, echoing Republican criticisms of the previous administration.
Crypto Rules Get
Major Overhaul
Atkins is
moving quickly to fulfill Trump’s promise to make America “the
crypto capital of the world.” The SEC has already dropped
several cryptocurrency cases since January, many involving platforms
that donated to Trump’s inauguration fund.
Unlike
Gensler, who viewed most digital
tokens as securities requiring strict oversight, Atkins believes most
tokens fall outside
securities law. He wants to create rules allowing 24/7
trading of tokenized stocks and bonds through blockchain technology.
The chairman
pointed to the FTX
collapse as proof that proper regulation works. While the
exchange’s offshore operations failed spectacularly, its regulated U.S. arm
protected customer funds and returned money to investors.
“We
want people not to be doing this offshore,” Atkins said, warning that
companies already offering tokenized U.S. stocks should be “very
careful” as new rules develop.
Wall Street Welcomes
Softer Touch
The
regulatory shift comes as Trump appointees across government roll back
Biden-era rules they viewed as business-hostile. Republican regulators are
embracing deregulation while pulling back from enforcement programs that
targeted corporate misconduct.
Atkins said
he’s addressing “market perception” that the SEC under Gensler lacked
due process and rule of law. The agency is also working to standardize
record-keeping requirements across different types of financial firms,
which currently face varying rules.
The
changes signal a return to the more business-friendly approach that
characterized Republican-led agencies before Biden’s presidency. Wall Street
firms have long complained about what they saw as excessive enforcement
and unpredictable rule-making under the previous administration.
This article was written by Damian Chmiel at www.financemagnates.com.
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