Trump's SEC Pick Likely To 'Bring Down The Stress Levels' Of Wall Street With Easier Enforcement Ride

President-elect Donald Trump's nominee for the Securities and Exchange Commission (SEC), Paul Atkins, drew attention for his industry-friendly track record and potential to reshape the agency's enforcement priorities.

What Happened: Atkins, a former SEC commissioner, is known for his skepticism of corporate penalties and support for a lighter regulatory approach. During his tenure from 2002 to 2008, Atkins voted against at least ten enforcement actions, including cases involving IBM and Citigroup. He argued that corporate fines unfairly penalize shareholders already harmed by misconduct.

As per experts, Atkins' dissenting votes during his SEC service suggest his preference for penalizing individuals rather than corporations, reflecting his broader criticism of the agency's enforcement process, Reuters reported on Tuesday.

Former SEC staff, including Gregory Faragasso, described him as meticulous and demanding, stating, "He put us through our paces and pushed for precision in enforcement matters."

Tyler Gellasch of the Healthy Markets Association remarked, "His nomination should bring down the stress levels and ambient heart rates for compliance staffers."

Why It Matters: If confirmed, Atkins' leadership could lead to a significant departure from the SEC's aggressive enforcement stance under current Democratic Chair Gary Gensler. Gensler's SEC levied over $20 billion in penalties, targeting systemic risks and corporate malfeasance. In contrast, Atkins' focus is expected to shift toward addressing clear investor losses, such as scams and frauds, rather than pursuing broader corporate accountability.

This shift could benefit major corporations, including Tesla Inc. TSLA, Coinbase Global Inc. COIN and BlackRock, which have faced intense scrutiny in recent years. Critics worry that a reduced focus on corporate penalties could embolden large firms to take risks, potentially exposing markets to systemic dangers.

Atkins was recently facing ethical scrutiny over his connections to financial entities he may soon regulate. Atkins founded Patomak Global Partners in 2009, a consultancy firm that has earned over $3 million in fees from banks, fintech firms, and cryptocurrency exchanges over the past decade, according to public records analyzed by Barron's.

Price Action: As per Benzinga Pro, SPDR S&P 500 ETF Trust SPY which tracks the S&P 500 had dropped by 1.54% in the past one month while the Invesco QQQ Trust, Series 1 QQQ climbed up by 0.41% in the same time, as of Tuesday pre-market hours.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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