Gary Gensler Could Be The Next SEC Chair: What Investors Need To Know

A new U.S. presidential administration means a new head of the major financial market regulatory body.

What Happened: On Tuesday, Reuters reported that President-elect Joe Biden plans to appoint former Commodity Futures Trading Commission (CFTC) Chair Gary Gensler to replace Jay Clayton as chair of the U.S. Securities and Exchange Commission.

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Why It’s Important: Clayton, who was appointed by President Donald Trump, earned a reputation for being soft on Wall Street, but experts say Gensler will likely take a much more hands-on approach to banks, brokers and other public companies.

Gensler enacted a new set of rules for swap trading at the CFTC during his tenure following the chaos that occurred during the 2008 financial crisis.

He also oversaw the prosecution of several major investment banks during a Libor price-fixing scandal. Gensler’s hard-nosed track record suggests he is willing and capable of standing up to Wall Street.

Gensler himself is a former banker at Goldman Sachs Group Inc. GS and a professor of global economics and management at MIT.

“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,” said Barbara Roper, director of investor protection at the Consumer Federation of America.

Benzinga’s Take: Investors can expect Gensler to focus his efforts on issues that are important to the Democratic Party, such as climate change, campaign finance, executive compensation and big banks and tech companies.

Gensler could also be good news for Bitcoin investors given he recently taught MIT courses on blockchain and digital currencies.