Gary Gensler, the U.S. Securities and Exchange Commission Chairman, has declared his resignation effective January 20, 2025, coinciding with Donald Trump's second presidential inauguration.
The Wrap reported that Gensler's departure marks the end of a transformative era for the SEC, underscored by significant reforms and robust enforcement actions.
Appointed in April 2021, Gensler took the helm at a critical time, immediately following the market volatility triggered by the GameStop trading frenzy.
His leadership has been pivotal in steering the commission through substantial changes aimed at strengthening the integrity and efficiency of the U.S. capital markets.
During his tenure, Gensler oversaw the implementation of sweeping reforms across the $83 trillion financial markets, encompassing both the U.S. Treasury and equity markets.
These reforms were designed to mitigate risk and enhance market efficiency, addressing long-standing vulnerabilities exposed by rapid technological advancements and evolving market dynamics.
Key reforms included updating the National Market System, shortening the settlement cycles to reduce transactional risk, and improving the quality of brokers' execution information. These measures have fortified the market infrastructure, making it more resilient against shocks and more transparent for investors and stakeholders.
Gensler's SEC also made significant strides in corporate governance, enforcing stricter rules on insider share sales and executive compensation disclosures.
Additionally, entities acquiring significant stakes in companies were required to make more timely disclosures, increasing the transparency of corporate actions and intentions.
New reporting requirements were introduced for large hedge funds and private equity advisors, greatly improving the quality of information available to the Commodity Futures Trading Commission. These changes have been crucial in enhancing the oversight capabilities of financial regulators and protecting the interests of investors.
Under Gensler, the SEC made critical updates in how public companies disclose risks related to cyber security and climate change.
Special purpose acquisition companies (SPACs) also faced more rigorous disclosure requirements, ensuring better transparency and accountability in this burgeoning sector of the capital market.
The enforcement division of the SEC was particularly active, receiving over 145,000 tips, complaints, and referrals. This led to significant actions against financial misconduct, including cryptocurrency-related fraud, with crypto-related issues comprising 18% of the last fiscal year's complaints.
The SEC's rigorous enforcement efforts from 2021 to 2024 resulted in around $21 billion in penalties and disgorgements.
Moreover, whistleblowers were awarded approximately $1.5 billion, reflecting the agency's commitment to incentivizing and protecting those who come forward with critical information on financial irregularities.
Additionally, over $2.7 billion was returned to investors harmed by fraudulent practices, and more than $250 million was recovered through enhanced examination practices. These figures underscore the SEC's pivotal role in maintaining market integrity and investor trust.
In announcing his resignation, Gensler expressed deep gratitude for the opportunity to lead the SEC, praising the dedication of the staff and the support from President Joe Biden and fellow regulators globally.
He acknowledged the collaborative efforts with Commissioners such as Allison Herren Lee, Elad Roisman, and others who played integral roles during his administration.
"The SEC has met our mission and enforced the law without fear or favor. It has been an honor of a lifetime to serve with them on behalf of everyday Americans and ensure that our capital markets remain the best in the world," Gensler stated, emphasizing the agency's success in protecting investors and facilitating capital formation.
