Republican Reps Slam Gensler for ‘Failed’ Rulemaking Agenda

House Financial Services Committee Chair Patrick McHenry, R-N.C., and Capital Markets Subcommittee head Ann Wagner, R-Mo., say Gensler is focusing on the wrong issues

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SEC Chair Gary Gensler | Source: Third Way "Gary Gensler" (CC license)

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A pair of House Republicans criticized SEC head Gary Gensler for “ignoring” capital formation issues, resulting in weaker public markets and harm to small businesses and investors, they allege in an open letter released Friday.

House Financial Services Committee Chair Patrick McHenry, R-N.C., and Ann Wagner, R-Mo., claim the SEC has been misguided in its inattention to promoting capital formation. Wagner also serves as the Capital Markets Subcommittee head. 

“Under your leadership, the Commission has proposed more than 50 rules, none of which directly promotes capital formation,” the representatives wrote in the letter on Thursday. “Instead, the Commission has focused on implementing costly regulatory disclosure requirements on topics that go beyond its scope.” 

Facilitating capital formation, an essential part of sustaining and promoting economic growth, is one of the SEC’s three main objectives, according to its mission statement

Wagner and McHenry said they’re calling on Gensler and his agency to immediately revise its agenda to put more focus on expanding market opportunities, while strengthening public markets. 

“Failing to act on this important pillar of the SEC’s mission threatens the strength of the U.S. capital markets and jeopardizes American business’ ability to foster domestic economic activity and compete globally,” the reps added. 

Gensler has led an ambitious agenda while heading the agency, SEC Commissioner Hester Peirce said recently. 

“Gensler has a tremendous amount of energy, and I think that’s reflected in a very busy regulatory agenda for the commission,” Peirce said during a discussion with Florida International University law students last month

“I do have grave concerns about the number of things we’re trying to do at the same time,” she added. 

Peirce and Gensler have gone head to head before, most recently over the SEC head’s approach to cryptocurrency regulation. 2022 was a record year for crypto-related enforcement actions for the SEC, data from Solidus Labs shows. 

“The SEC announced 30 crypto-related enforcement actions in 2022, more than any other regulator we identified worldwide,” Solidus analysts said in the report. 

Wagner and McHenry have requested Gensler respond to five questions posed in their letter, including information about how the agency is considering the impact of fewer public company offerings. 

The representatives have asked Gensler to respond by April 27.


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