Breaking Down Possible SEC Chair Nominees

Possible SEC Chair nominations of Atkins, Bondi, Gallagher and Stebbins — Who Are These Guys?

My take is that Gary Gensler, the current Chair of the U.S. Securities and Exchange Commission will resign soon (the people have spoken) and that on January 20, 2025, President Donald Trump will designate either of the current Republican SEC Commissioners — Hester Peirce or Mark Uyeda — as “Acting” SEC Chair. (Unless she opts not to accept, Peirce seems more likely to be named “Acting” Chair because she is senior to Uyeda.)

Historically, “Acting” SEC Chairs are typically mere caretakers/placeholders and are given specific orders by the White House not to take any substantive actions before the new SEC Chair is confirmed (so as not to disrupt any plans the new SEC Chair will want to begin upon arrival).

Like every other U.S. government agency, at the direction of President Trump (who won by an epic landslide), the SEC will experience a mammoth sea change in every direction, especially in the area of crypto-related enforcement and regulation, which I predict will likely grind to a screeching halt.

Paul Atkins, Brad Bondi, Dan Gallagher and Bob Stebbins are all highly impressive choices for the next SEC Chair and are all reportedly on the short list to be nominated. I know, and have worked with, Paul, Brad and Dan, and FWIW, here are my quick thoughts on the future of the cryptoverse under all 4 potential SEC Chair nominees….

Red States Challenge SEC Authority to Police Digital Assets

Digital assets “are just that—assets, not investment contracts covered by federal securities laws,” the complaint says. They should therefore be regulated by the states, it says. To hold otherwise will allow the SEC “to regulate (and displace State regulation of) not only all transactions in digital assets but also a boundless array of other assets as well, from collectibles to luxury goods and beyond,” it says.

The states seek a declaration that digital assets aren’t investment contracts and an injunction preventing the SEC from taking enforcement action against digital platforms that don’t register as securities dealers.

They also seek a declaration that the SEC violated the Administrative Procedure Act by not subjecting its regulation of digital asset platforms to notice and comment rulemaking, damages, costs, and fees.

The SEC and cybersecurity internal controls cases: R.R. Donnelley and SolarWinds

Canellos is not a fan of the way the materiality standard has been applied to the cyber security cases. From the panel transcript:

Okay, look, I think the rules in general were much needed. Right? I think we had very little guidance in this and I applaud the commission for coming up, taking a stab at it. Their rulemaking, I think, is imperfect, imperfect, and their guidances minimal, minimal. So as we, you know, experience the world under the new regime of these disclosure standards I think that how enforcement and how the commission interprets these rules — how it judicious it is in exercising its discretion — is critical. Because I really do think that the guidance that we’ve received is minimal…

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When you take the Basic v. Levinson standard and you try to apply it to cyber incidents, I think it’s incredibly challenging. And I would just suggest to people that if you read the decisions that have come out or this settlement that have come out. You you’ll be very hard pressed. To understand where the line is between material and, and not material. Most of the cases that you’ll read or the settlements that come out. The findings will say something like. A threat actor entered the system. A threat actor. Exfiltrated a number like 42 gigabytes of data. The threat actor moved laterally within the system. And therefore there was some failure to disclosure or therefore your mild. Disclosure, that’s rather generic about cyber threats was inaccurate and misleading. Mm-hmm.

And you almost read these cases and say, it’s really just my tone of voice that makes it material. What is 42 gigabytes of day. What kind of data? How, what kind of data? 42 gigabytes of data. Lateral movement. You know, you say it loud enough and it’s like, oh my God, I need to disclose it.

The Trump-Connected Brad Bondi Is a New SEC Chair Contender and Pro-Crypto

Brad Bondi, Global Co-Chair of Investigations and White Collar Defense at law firm Paul Hastings, is one of several people being considered as president-elect Donald Trump’s appointment to the SEC, three sources connected to either Bondi or indirectly to Trump’s transition team told Unchained. Bondi has emerged as a potential pick this week amidst a flurry of news articles suggesting an array of names in the mix, like former CFTC Commissioner, “Crypto Dad” Chris Giancarlo, Robinhood attorney Dan Gallagher, and former SEC Commissioner Paul Atkins.

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Brad Bondi is a member of the conservative lawyers association The Federalist Society, and, like SEC Commissioner Hester Peirce, he SERVED as General Counsel to former SEC Commissioner Paul Atkins. “If you’re Atkins approved, Atkins trained, that wins you a lot of love with Senate Republicans generally,” said George Mason University law professor J.W. Verrett. Atkins is widely respected in conservative legal circles as well as amongst Senate Republicans.

New Battleground: Wall Street Law Firms Eye London Growth

New York may be an ultra-competitive legal market but many of the city’s leading law firms are becoming increasingly focused on taking market share in a different city: London.

In recent months, firms such as Cravath Swaine & Moore; Davis Polk & Wardwell; Cleary Gottlieb Steen & Hamilton; and Skadden, Arps, Slate, Meagher & Flom, among others, have all hired prominent laterals in London. Most of these are focused on growing their corporate practices in the U.K, to help service European deals, restructuring, funds and finance work, and their hiring is made easier by the fact they can offer larger compensation packages compared with U.K. firms.

“Many high-performing firms have made a strategic choice to prioritize growth in London in practices such as finance and private equity,” noted Kent Zimmermann, law firm consultant at Zeughauser Group, calling London an attractive market for “money practices.”