To Ensure U.S. Capital Markets Remain the “Envy of the World,” Paul Atkins Must Stabilize the SEC and Restore Regulatory Equilibrium
Has anyone ever told you that America’s capital markets are the envy of the world?
I’ve heard this truism repeated a thousand times by a thousand important people; if you are reading this you probably have, too.
Today, America’s Capital Markets are, indeed, the “Envy of the World.” However, they are being challenged, and will remain preeminent only though strong leadership at the SEC.
The preeminent position of U.S. capital markets has been a reality for decades. They were the gold standard when I was born in Greenwich, Connecticut, in 1978; They were the gold standard when I arrived in Washington, DC, in 1999, as an intern for a member of the House Committee on Banking and Financial Services. We’ve come to take their preeminence for granted.
Today, however, amidst internal challenges to the SEC brought on by unprecedented domestic political division, by an Executive branch hostile to independent regulatory authority, and by unprecedented cost-cutting initiatives by new entity DOGE, the continued preeminence of America’s capital markets can no longer be taken for granted.
Today, amidst external challenges, such as tariff wars and an emergent China, America’s capital markets are being challenged.
America’s capital markets will remain “the envy of the world” only through strong leadership at the SEC.
That leadership must come from the SEC’s new Chair, Paul Atkins.
It’s Time to Turn the Music Down at the SEC.
Wednesday, April 9, 2025, was a landmark day for America’s capital markets.
It was the day that President Trump woke up and posted on Truth Social: “THIS IS A GREAT TIME TO BUY!!!”
It was the day the President announced a 90-day pause in his trade war with the world, causing global markets to whiplash and brokerage accounts to balloon – and pushing U.S. stock markets to realize their largest single day gains since 2008,
Some of the brokerage accounts that appear to have ballooned the most that day belonged to important people in President Trump’s Washington – people like U.S. Rep. Marjorie Taylor Greene, who the NY Post reported “bought up tech, apparel shares that surged after Trump’s tarries pause.
The day’s biggest individual winner should come as no surprise: Tesla Founder and “Co-President” Elon Musk made a whopping $36 billion as Tesla stock soared up 23 percent.
Finally, it was the day – near the end of the day; around 7pm to be precise – that the U.S. Senate voted 52-44 to confirm Paul Atkins to be the SEC’s 34th Senate-confirmed Chair.
Paul Atkins arrives at the SEC amidst unprecedented challenges, strain and turmoil.
Arguably, not since Joseph Patrick Kennedy was confirmed to be the nation’s first SEC Chair has so much rested on the shoulders of incoming SEC Chair.
Paul Atkins’ First Challenge as SEC Chair Will be to Stabilize the Agency.
TLC doesn’t come naturally to Atkins; It’s not his thing. His tenure as an SEC Commissioner, from 2000-2008, was characterized by voting against agency enforcement actions and issuing dissents even against fellow Republican commissioners.
However, as of April 9, the SEC is Paul Atkin’s agency, and the SEC’s staff are Paul Atkins responsibility. The staff at the SEC are world class, but they’re not doing well.
Over the past few weeks, as Washington DC’s cherry blossoms began unfurling to reach Peak Bloom, and President Donald Trump’s trade war with China roiled financial markets, hundreds of SEC employees were permanently decamping the agency.
This mass exodus of SEC staff, representing an abrupt loss of critical years of institutional experience administering complicated rules and regulations, has taken a particularly hard toll on the agencies Division of Trading and Markets – whose work is integral to the agency’s mission of “protecting investors” and maintaining “orderly and efficient markets.”
Just weeks ago, Paul Atkins told the Senate Banking Committee that he is looking forward to working with DOGE to “make sure that taxpayer funds are being used properly, that the work of the Commission is being done effectively and efficiently.”
The SEC is reeling from the trauma of DOGE, Trump, the political whiplash after previous Chair Gary Gensler’s Departure.
America’s top market regulator needs some TLC, and hopefully Atkins will recognize this human element and tend to it.
He needs to show the SEC’s employees that his entry into 100 F Street means a semblance of normalcy for them. He needs to stabilize the ship and let it be known that that he will not allow the dystopian wrecking ball to come for the SEC the way that it came for the CFPB.
The nightmare is real, but Atkins must let it be known that it will not be allowed through the gates of 100 F Street.
Paul Atkins Must Also Restore an Equilibrium to the SEC.
In the 87 days since Gary Gensler last exited 100 F Street, on January 20, 2025, America’s top market regulator has done an about-face on virtually every important policy issue facing investors and capital markets, spending the first two and half months of the second Trump Administration feverishly reversing itself on issue after issue after issue.
Under Acting SEC Chair Mark Uyeda, the SEC reversed its position on just about everything related to digital assets, instead embarking on “travel to a destination where people have great freedom to experiment and build interesting things,” and launching a frenetic campaign “to provide clarity on the application of the federal securities laws to the crypto asset market” through a “Spring Sprint Toward Crypto Clarity.”
The SEC’s Enforcement Division spent February and March abandoning enforcement actions against Coinbase and other stable coins issuers, while Acting Chair Uyeda proudly walked away from the SEC’s defense of rules on the enhancement and standardization of climate-related disclosures. The agency’s Corporation Finance Division, meanwhile, has been jettisoning one investor protection guardrail after another, drawing scathing criticism and public rebuke from Democratic Commissioner Carolyn Crenshaw.
Sensing an opportunity, Republican majorities in Congress are pressing the agency to completely undermine its credibility with markets and investors and withdraw an additional fourteen Biden era rules. Meanwhile, Congressional Democrats, led by newly installed Senate Banking Committee Ranking Member Elizabeth Warren are eager to undermine Atkins by portraying him as nothing more than a stool pigeon for Trump and Wall Street.
Paul Atkins Must be Independent and Apolitical.
If Atkins is to be successful, he cannot be the Chair his GOP Congressional allies want him to be, nor can he be the caricature his Democratic Congressional critics expect him to be. Atkins must instead be an independent minded leader, a credible and fair regulator, and his own man.
That means exhibiting patience, discipline, and courage, in the face of Trump, Musk, and the peculiar baggage and drama of the second Trump Administration.
If U.S. markets are to remain the world’s envy, Atkin must refuse to allow the SEC to become the political instrument so many want it to be. That means finding a strategy to defuse and mitigate the political hot-potatoes and conflicts that will continue to land in the lap of the SEC amidst an administration led by Donald Trump, complicated by Co-President Musk, and populated at the top levels by some of America’s most wealthy and complicated figures.
Paul Atkins Must Also Improve The SEC’s Relationship with Congress.
The relationship between Congress under Gary Gensler was arguably the most strained of since any SEC Chairman since Chris Cox. Gensler often appeared to only really care what Democrats in Congress thought mattered, regardless of who held the Congressional gavels. Republicans in turn had nothing but harsh words for Gensler.
From Gensler’s standpoint, the delegitimizing of Congressional Republicans – both their policy ideas and their attempts to exercise of oversight authority – was rationale.
As Joseph Heller wrote: “Just because you’re paranoid doesn’t mean they aren’t out to get you.” In Gensler’s case – Republicans were out to nail him, and out to undermine everything he was trying to do at the SEC.
At the same time, Republicans would point out that under Gensler, the SEC was regulating at a breakneck speed, attempting to effectuate multiple major changes in policy and insulated many of its signature rulemakings from the CRA lookback period.
Both perspectives are valid.
However, the long-term institutional interests of the SEC require a healthy relationship with Congress, and a healthy respect for Congress’s legitimate oversight authority.
As former SEC Chair J. Sinclair Armstrong correctly recognized: “The good relationships which the Commission has with the Congressional Committees result from a mutual recognition by the Committees and the Commission of the basic objectives of the Congress and the Commission in the field of interstate commerce with respect to securities.” There are “many areas in which the Congress has recognized complications were so great, need for swift action was so great, for flexibility so great, that the Congress established independent agencies for the very purpose of delegating to those agencies powers which in fact Congress could exercise itself if it wished to, but which are better exercised by administrative agencies.”
It is through “good relationships” with Congress that SEC will continue “to exercise quasi-legislative authority” on complicated questions such as the regulation of U.S. capital markets.
At a moment when the knives are out for independent agencies, and many of the key courts dominated by conservative judges and Justices, amicable relationships with Congress will be important for the SEC and for Atkins.
Paul Atkins Has Leverage. He Need Only Find Courage.
Fortunately for investors and global capital markets, Paul Atkins can be the type of SEC Chair that the moment requires. That is in significant part because Atkins, much more than any other Trump appointed financial services regulator, has leverage.
As SEC Chair, Paul Atkins gets to decide whether and when the SEC gives the benefit of the doubt to Trump, Musk, and other rich men and women in the Second Trump Administration, who, by virtue of their enormous personal wealth and senior government posts, are certain to at times find themselves in awkward positions vis-à-vis various federal securities laws – including notably, the Stop Trading on Congressional Knowledge Act of 2012 or STOCK Act.
As explained by a Congressional Research Service Report, this 2012 STOCK Act, among other things, “affirms and makes explicit the fact that there is no exemption from the ‘insider trading’ laws and regulations for Members of Congress, congressional employees, or any federal officials. The law also expressly affirms that all federal officials have a ‘duty’ of trust and confidentiality with respect to nonpublic, material information which they may receive in the course of their official duties, and a duty not to use such information to make a private profit. In that sense, the rules and regulations administered by the SEC reflect cards that Atkins will be able to play in the interest of protecting the SEC’s personnel and independence.”
To the extent that Atkin’s plays his hand smartly, focusing on the institutional interests of the agency as a regulator, and on the needs of the investing public, then his tenure as SEC Chair is likely to be a success, and U.S. capital markets are likely to remain “the envy of the world.”
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