President-elect Joe Biden will reportedly name former commodities regulator Gary Gensler to head the U.S. Securities and Exchange Commission, an appointment that could mean a sharp shift toward tougher regulation of Wall Street.

Reuters cited two sources familiar with the matter in reporting that Gensler, a former Goldman Sachs banker who headed the Commodity Futures Trading Commission from 2009 to 2014, would replace Jay Clayton as chairman of the SEC.

Gary Gensler

“His appointment as the country’s top securities regulator is expected to put an end to the four years of rule-easing that Wall Street banks, brokers, funds and public companies have enjoyed” under Clayton, Reuters said.

At the CFTC, Gensler created a regulatory framework for derivatives and oversaw enforcement actions against investment banks accused of manipulating the benchmark London Interbank Offered Rate, developing a reputation for being willing to stand up to powerful Wall Street interests.

Gensler served as the chief financial officer of Hillary Clinton’s 2016 presidential campaign. Since 2018, he has taught courses on blockchain and digital currencies at MIT Sloan School of Management.

“He was terrifically effective at the CFTC, he knows the markets as well as anyone on Wall Street, he’s a smart and tough regulator who knows how to get things done, and he cares about investor protection,” Barbara Roper, director of investor protection at the Consumer Federation of America, told The Wall Street Journal.

Policy experts expect that as SEC chair, Gensler will pursue new corporate disclosures on climate change related-risks, political spending, and the composition and treatment of their workforces.

Under Clayton, the commission has pursued an ambitious regulatory overhaul, loosening restrictions on public company listings, reducing corporate disclosures to investors, and weakening auditor independence.

Progressives such as Sen. Elizabeth Warren, Massachusetts Democrat, criticized Clayton for not mandating that companies disclose aspects of their business that could be affected by climate change or government efforts to curb it.

“The top of the agency is going to be setting an agenda in the opposite direction of where Jay Clayton and the congressional Republicans have been steering for years, by expanding and improving industry disclosures and restoring investor rights,” said Ty Gellasch, executive director of the Healthy Markets Association.

Third Way Think Tank via Flickr

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