Is SEC Engaged in "Course-Correction" or "Regulatory Jenga?"

Prepared Remarks of SEC Chairman Paul S. Atkins Before SEC Speaks

This brings me to today. The crypto markets have been languishing in SEC limbo for years.

Initially, the SEC first pursued what I call the “head-in-the-sand” approach — perhaps hoping that crypto would go away. Then, it pivoted and pursued a shoot-first-and-ask-questions-later approach of regulation through enforcement. The “just come in to visit” entreaty often meant coming home to a subpoena. It seemed like a catch-22 for market participants. This environment did not create trust. In reality, the message was, “You go figure it out.” That is a fine approach if the regulator plays an active role in interacting with the marketplace to encourage solutions and adapt existing rules and practices if the existing approaches are inapposite to new developments in technology. Old ways of doing things should not be immutable, especially if Congress has granted an agency discretion to make changes consistent with Congressional intent and in the public interest. While the SEC must be faithful to its statutes in any effort to be innovative, it should use its available authority and discretion to adapt to and accommodate new developments.

A Reckless Game of Regulatory Jenga – Remarks at “SEC Speaks” by Commissioner Caroline A. Crenshaw

My remarks today offer a word of caution as the agency chips away at decades of our own work – and, at the same time, as we stare down alarming market volatility, emerging risks, and calls for deregulatory action in all corners of our markets.

As we careen down this path full speed, it almost feels like we’re playing a game of regulatory Jenga. Our proverbial Jenga tower is made up of a set of discrete but interrelated rules and laws, deeply and carefully developed over the years, and implemented by a strong agency of experts, skilled in overseeing and regulating our increasingly complex markets.

Of course, in Jenga, the tower remains standing when you pull out a block or two here and there. But, how many blocks can you pull before the tower gives way? When it comes to the stability of our markets, how far are we willing to take our dangerous game? Who would ultimately be the loser when the foundation gives way? I worry, as we all should, that those losing the most won’t be the influential, monied interests; rather, it will be the Main Street Americans – the investors and small business owners who can least afford the greatest loss. Consider some of the actions of the agency over the past weeks and months.

SEC’s Novel ‘Shadow Trading’ Case Lacked Key Piece, Exec Says

The SEC’s first enforcement action targeting an employee’s use of nonpublic information to trade in a competitor’s stock never should have gone to a jury, a former biotechnology executive told the Ninth Circuit.

Medivation Inc.’s insider trading policy permitted the transactions at the center of the civil trial, “meaning there was no duty not to trade,” Matthew Panuwat said May 16 in his opening appellate brief. Without a duty, there was no breach of duty, no deception, and no “deceptive device” needed to establish the type of securities fraud violation the Securities and Exchange Commission alleged, Panuwat argued.

Stablecoin Bill Advances in Senate in Big Win for Crypto

Stablecoin legislation overcame a procedural blockade in the US Senate, marking a major victory for the crypto industry after a group of Democrats dropped their opposition Monday.

The industry-backed regulatory bill is now set for debate on the Senate floor with a bipartisan group hoping to pass it as soon as this week, although senators said a final vote could slip until after the Memorial Day recess.

Democrats had united to filibuster the legislation earlier this month amid a furor over President Donald Trump’s crypto dealings along with other concerns related to the regulation of stablecoins.

But the Senate voted 66-32 on Monday night to end the filibuster.

Opening Remarks at the SEC Town Hall by Paul S. Atkins, Chairman

Thank you very much for coming to our first “town hall” meeting together. To those of you here with me at our headquarters in Washington, it is so great to see you. And, let me add an especial welcome to you who are joining from our regional offices around the country.

I am pleased that we can meet today to discuss the SEC; our important mission on behalf of our fellow citizens, investors, and taxpayers; as well as some of my priorities as your new Chairman. […]

We should not overlook the part about fair, orderly, and efficient markets. Congress calls on us to ensure that our regulations balance costs and benefits, that they do not become too burdensome that they add needless friction to the marketplace, undermining the capital formation that yields so much benefit.

But, what if the SEC’s leadership has directed the agency, which oversees and is responsible for the markets, to lose its own fairness, orderliness, and efficiency? Does that undermine the markets’ own approach if their policeman comports itself with inconsistent values? Predictability, due process, rule of law, integrity are all part of what create respect and project a sense that one can get a fair shake without vindictiveness or ulterior motives.

Unfortunately, in the last four years until January, the SEC’s long-held reputation has suffered in that vein.