Securities and Exchange Commission Chairman Gary Gensler will leave the SEC at noon on January 20, 2025, the day Donald Trump is inaugurated as the next president of the United States.
Gensler was appointed by President Joe Biden to lead the agency at the start of his administration in 2021. His tenure was marked by the introduction of an update to the commission's marketing rules, and he oversaw the implementation of numerous regulations (including the Best Interest Rule good).
In a statement, Gensler thanked Biden for the “extraordinary responsibility” of leading the agency and called the staff “deeply mission-driven” and focused on protecting investors and ensuring markets function for “investors and issuers alike.”
“The staff is made up of real public servants,” he said. “It has been the honor of a lifetime to serve with them on behalf of ordinary Americans and ensure that our capital markets remain the best in the world.”
Under Gensler, the commission filed more than 2,700 enforcement actions and collected about $21 billion in fines and disgorgement orders, returning more than $2.7 billion to victim investors between 2021 and 2024, according to the SEC. During his tenure, the commission also recovered more than $250 million for investors through its Examinations Division.
During Gensler's tenure as head of the agency, the commission brought the first cases under Reg BI, the broker/dealer conduct standards rule was enacted in the final year of the Trump administration. Starting in fall 2022, commission in charge many of the industry's most prominent players (including Goldman Sachs, Morgan Stanley and UBS) for failing to monitor employees' off-channel business communications (such as the use of WhatsApp and SMS text messages).
The commission also focused on alleged violations in the crypto space, growing its crypto and cyber staff in 2022 and bringing numerous cases (often to the chagrin of crypto advocates). In the notice announcing his departure, the commission cited that 18% of the tips, complaints and referrals the SEC received last fiscal year were crypto-related. The commission also sued several crypto exchanges, including Binance and Coinbase.
While consumer advocates applauded Gensler, many industry supporters objected to the pace of proposed and finalized rules over the previous four years.
President-elect Trump is a fierce critic, having previously vowed to fire Gensler on “day one” of his presidency (although YahooFinance explained that a future president cannot dismiss a SEC chairman without cause).
However, Gensler clarified that he would resign at noon on January 20, when Trump was scheduled to be sworn in as the nation's 47th president. Gensler's term was set to expire in 2026.
Democratic commissioners Caroline Crenshaw and Jaime Lizárraga, as well as Republican commissioners Mark Uyeda and Hester Peirce, remain on the commission. Whether Trump will appoint a current commissioner as chairman or reach outside the agency remains to be seen.
In an interview with WealthManagement.comMark Quinn, director of regulatory affairs at Cetera Financial Group, speculated that Trump would be more likely to walk out of the agency than to pick Peirce or Uyeda, since presidents tend to want someone they're familiar with in the top seat.
However, Jason Britton, founder and chief investment officer of Reflection Asset Management, speculated that Trump would nominate Peirce for the job, given that he appointed her to the commission during his first term.
“She would be the natural heir since she was appointed by him to begin with,” he said.