Biden’s SEC faces Senate panel amid calls to address gamestop frenzy

WASHINGTON: President-elect Biden Gary Gansler, who heads the Securities and Exchange Commission, has been facing a series of calls from senators since Tuesday to focus on issues ranging from weather reversals at Gamestop. Corpo.

Trade frenzy.

Progressives, who supported Mr. Gensler’s nomination, hope that the PET regulator will oversee the SEC’s Wall Street and use public companies to advance broader domestic policy goals.

Republicans, however, have been critical of his aggressive stance against banks and other powerful interests when he was chairman of the Commodity Futures Trading Commission from 2009 to 2014.

Rohit Chopra testified in the nomination hearing before the Senate Banking Committee with the selection of Mr. Biden as the head of the Consumer Financial Security Bureau.

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The SEC is focusing on the Game Stop episode and considering whether there is a need to bring more transparency around the practice of short sales, a common way of betting that the stock price will fall. Mr. Gansler did not consider the situation in the testimony prepared for delivery to the Banking Committee.

They are also likely to face questions about a proposal pending before the SEC from Nasdaq. Inc.

It needs thousands of companies listed on its stock exchange to include women, ethnic minorities and LGBT individuals on its board.

Republicans on the Banking Committee urged the SEC to reject the proposal, saying it interferes with the members’ duty to manage companies in the best interests of their shareholders.

For their part, Democrats say the SEC should require financial announcements from publicly listed companies to include more information about diversification and worker pay. They are also asking for a more comprehensive report on the risks posed by climate change or government efforts to prevent it. And Mr. Gansler is facing calls to tighten the 2019 rule that has reduced the need for brokers to put their customers’ interests ahead of theirs.

Following the departure of President Jay Clayton in late 2020, the SEC has split evenly between two Republicans and two Democratic commissioners. Which limits its ability to pass various rules that the progressive seeks to follow.

The Game Stop episode was the subject of a hearing before the House Financial Services Committee this month. He is a U.S. citizen. Has expressed concern about the integrity of the stock market and the rules of its governance. The SEC and other officials are investigating whether the saga calls for policy changes or was fueled by criminal misconduct such as market manipulation.

House legislators took various positions on the enormous influence of trading. Democrats focused on whether simple trading applications and commission-free business models such as Robinhood Markets Inc. Helps or hurts individual investors. Some Republicans praised the model for helping small businesses reduce transaction costs and called for less regulation on Wall Street.

Legislators from both parties met on the issue of whether short sales should be subject to further regulation. During the turbulent period, small-time investors used social media to encourage each other to hurt hedge funds by betting that prices would fall.

Critics of the SEC in recent years have said it was more focused on helping companies raise capital and not enough on investor protection. Some have also called on the commission to reconsider its implementation efforts on large banks and hedge funds.

Under Mr. Clayton, Amalwari emphasized the wrong practices that hurt less practical investors, including cryptocurrency scams and Ponzi schemes.

Democrats can also target private-equity firms and hedge funds, lightly controlling limited investment companies for small investors. Companies accounted for 69% of the capital raised in 2019, while regulatory public markets accounted for 31%, according to SEC estimates.

Mr. Gonsal, a former Goldman Sachs executive, is known in Washington as an aggressive regulator who took powerful financial interests while serving as head of the Commodity Futures Trading Commission.

C.F.T.C. In, he overcame opposition to writing rules governing the markets for hundreds of trillion dollars of derivatives. Some of these critical financial instruments were blamed for the 2008-09 financial crisis.

“When the SEC does its job – when there are clear rules of the road and there is no cop to enforce them – our economy grows and the country grows,” Mr. Gansler said Tuesday.

“But when we look at the ball wrong when we fail to eradicate wrongdoing, or fail to adapt to new technologies, or really understand the novel’s financial tools, things can go very wrong. And when that happens, people get hurt. ”

Write to Paul Kirnan at [email protected]

The Saga has been asked to test key players due to the recent trading volatility of Game Stop and other stocks. The investigation of potential misconduct focuses on the actions taken by both brokerages and users on social media forums. WSJ explains what regulators are looking for and why this situation is unique. Example: Jacob Reynolds (originally published February 18, 2021)

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