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Gary Gensler, the new sheriff on Wall Street, has set some ambitious plans for cracking down on stock-trading shenanigans — but the sheriff will need some deputies if he wants to get the job done.
As the new chairman of the Securities and Exchange Commission, Gensler told lawmakers on Capitol Hill Thursday he wants to do something about the “gamification” of trading by small investors. He wants to end abuses committed by short sellers who push stocks lower. He will try to force traders who use complex derivatives to disclose their positions before risking billion-dollar losses. He also wants to protect people from being snookered into buying risky cryptocurrencies.
In fact, if you listened to Genlser closely during his testimony, there’s almost no part of the burgeoning financial business that he doesn’t want to control. What he didn’t tell Congress is that for all his regulatory bluster, he hasn’t hired enough people around him to even begin to carry out his mission.
As this column goes to press, Gensler still has not named his picks to run some of the most important parts of the SEC. Acting holdovers from the Trump administration continue to serve as the commission’s general counsel, head of trading and markets, corporate finance — and the all-important enforcement-division chief whose job it is to pursue Wall Street crooks.
SEC watchers say they can’t recall an administration past the 100-day mark that didn’t have all those positions filled. Even worse, dig deeper into the Biden administration and you will find that the SEC isn’t the only agency that’s operating nearly rudderless. The Biden White House has yet to appoint a new antitrust chief to run the Justice Department — a key slot that will determine the future size and scope of technology companies and what corporate mergers get approved.
There is no chair for the Federal Communications Commission to determine if the administration brings back so-called net neutrality, the concept ditched under Trump but embraced by Biden and progressives because it forces Internet providers to treat all content equally regardless of existing business relationships.
Likewise, there is no Federal Trade Commission chair and so no new consumer-protection agenda. If you want to know why the future of TikTok remains in limbo after nearly a year of controversy, it’s because key slots in the Treasury and State departments remain unfilled. Plus, it’s unclear if a Trump appointee will remain as assistant attorney general for national security. As a result, the administration still hasn’t ruled if the Chinese-owned short-video app is still a threat to national security and must be banned in the US.
Of course, you can make the case that a less activist SEC, FTC and DOJ might be a good thing — less regulation is usually good for business. But you can also make the case that Biden’s promises to make the world safer for investors and consumers is being thwarted by bureaucratic sclerosis, and he’s getting a pass from the mainstream media that continue to peddle the fiction that the Biden White House is a well-oiled machine about to change America, FDR-style, as opposed to the allegedly feckless Trumpers.
“It’s so weird that none of these positions are filled,” said one veteran white-collar attorney who deals with the SEC. “I can’t remember a time when every major office and division at the SEC has been headed by an acting, and none of these positions require Senate approval.”
Another long-time DC-based attorney who represents tech companies tells me his business is at a standstill because of the vacancies at FCC, FTC and the DOJ’s antitrust-division chief. “You just can’t get anything done at these places because there’s no Biden people in charge of implementing an agenda,” he said.
The logjam in appointments appears to be a function of two issues. The first is the full-on obsession by the Biden White House to spend as much money as quickly as possible on COVID relief, infrastructure and anything else the people there can think of, I am told. By forcing so much of the bureaucratic attention on spending (albeit much of it of dubious necessity), the White House has crowded out other important issues.
That means, among other unfinished business, a border crisis that never seems to end because there’s no one available to fix the mess.
The other thing handcuffing appointments is that the vetting goes beyond normal national-security checks and qualifications such as work experience. For Team Biden, all the right boxes need to be checked before someone can make it through the process.
Those boxes have a high priority for diversity and other soft issues near and dear to the heart of the business-hating progressive caucus in Congress led by Massachusetts Sen. Elizabeth Warren, AOC and a handful of others with the loudest voices in the Democratic Party.
For proof, see the short-lived tenure of Alex Oh as SEC enforcement chief. Oh appeared to check all those right boxes — she was a gifted lawyer and a woman of color. But as I pointed out last week, she was forced to leave the job just days after taking it when a left-wing advocacy group exposed her legal work for Big Oil.
Again, as a free-market type, I’m seeing the upside of the Biden bureaucracy that can’t get off the ground and do stuff that will make markets less efficient. But don’t tell me these guys have their acts together. If they did, we still wouldn’t be discussing a TikTok ban.
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