Senate Banking ranking member Tim Scott, R-S.C., didn’t waste any time Wednesday afternoon praising Paul Atkins after President-elect Donald Trump tapped Atkins to chair the Securities and Exchange Commission.
Atkins, a former SEC commissioner, would take over from SEC Chair Gary Gensler, who said last month that he will step down when Trump is inaugurated on Jan. 20.
Gensler, who was appointed by President Joe Biden and assumed office in April 2021, has been excoriated by Republicans and many financial firms and trade groups for being too aggressive in pursuing an expansive regulatory agenda.
“Paul Atkins has the experience necessary to lead the agency out of Gary Gensler’s disastrous tenure and help revitalize the U.S. capital markets system — which is critical to our economic growth, job creation, and innovation,” Scott said in a statement issued within 30 minutes of Trump’s announcement of his choice on the Truth Social platform.
“I look forward to working with him to increase access to capital for entrepreneurs, open our capital markets to all Americans, and create a regulatory environment for digital assets that encourages innovation here in the United States, not overseas,” Scott said.
Scott is set to chair Senate Banking next year, when Republicans gain control of the chamber.
Sen. Elizabeth Warren, D-Mass., who is expected to become Senate Banking ranking member, sounded skeptical of Atkins in a statement.
“The U.S. stock market is the envy of the world precisely because the SEC promotes safe and transparent markets that protect investors from getting cheated, so I’m concerned about putting at the helm of the SEC a Wall Street lobbyist whose main contribution during the last financial crisis was to protest fines against the giant corporations that defrauded investors,” she said.
Atkins, CEO and founder of the financial services consulting firm Patomak Global Partners based in Washington, was a commission member from 2002-08.
In recent years, he has been a vocal critic of what SEC detractors call the agency’s tendency to conduct “regulation by enforcement.” Agency officials say they’re following existing securities laws.
Trump praised Atkins for his understanding of digital assets. Atkins is on the board of advisers to the Token Alliance.
“Paul is a proven leader for common sense regulations,” Trump said in the Truth Social post. “He believes in the promise of robust, innovative capital markets that are responsive to the needs of Investors, & that provide capital to make our Economy the best in the World. He also recognizes that digital assets & other innovations are crucial to Making America Greater than Ever Before.”
The Investment Company Institute, which represents the mutual fund industry, also was quick to endorse Atkins.
“His distinguished record, years of experience in the industry, and history of service at the SEC make him a supremely well qualified nominee,” ICI CEO Eric Pan said in a statement. “Atkins understands that registered fund companies play a major role in the US economy.”
As an example of “regulation by enforcement,” Atkins has pointed to the SEC’s crackdown on investment advisory and brokerage firms for inadequately disclosing fees that they receive from mutual fund firms when they recommend the funds for clients’ and customers’ portfolios.
Atkins and other critics say the SEC has never clarified its expectations surrounding the fees and is pursuing enforcement cases rather than setting policy through rulemaking. SEC enforcement leaders say that advisers and brokers have failed to meet disclosure requirements.
Atkins also has been a proponent of the SEC’s Regulation Best Interest (Reg BI), which prohibits brokers from placing their own revenue interests ahead of a customer’s interest.
The five-person SEC finalized the rule under a Republican majority during the first Trump administration to try to bring brokers and investment advisers under similar advice rules. Advisers owe a fiduciary duty to their clients. Reg BI is not legally a fiduciary standard.
“Paul Atkins is not fiduciary friendly,” Knut Rostad, president of the Institute for the Fiduciary Standard, wrote in an email. “Yet, he could serve retail investors well if he actually made disclosure clear, concise and meaningful.”
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