Written by: Zhao Yuhe
Source: Wall Street Journal
People familiar with the matter told the media that Richard Farley, a partner at the law firm Kramer Levin Naftalis & Frankel, and Norm Champ, a partner at the law firm Kirkland & Ellis, will become candidates to succeed Gary Gensler as chairman of the U.S. Securities and Exchange Commission (SEC).
In addition, there are media reports that Robinhood's chief legal officer Dan Gallagher, current SEC commissioner Mark Uyeda, and former Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbert are also among the candidates.
Other sources told the media that former SEC Commissioner Paul Atkins and Willkie Farr & Gallagher law firm partner Robert Stebbins are also under consideration. According to Reuters, Atkins served on Trump's transition team in 2016 and was a strong contender for the SEC chairmanship that year.
Two people familiar with the matter told the media that Gallagher, Robinhood's chief legal officer, is a popular candidate among cryptocurrency industry executives who have donated millions of dollars to Trump's Republican campaign. Currently, Gallagher is most likely to be appointed, but discussions are still ongoing. Trump's press secretary Karoline Leavitt said in a statement: "President-elect Trump will soon begin deciding who will serve in his second administration. These decisions will be announced when they are made."
Media reports said members of President-elect Trump's transition team and other advisers have begun talks with potential candidates after Tuesday's election. Discussions are still ongoing and it may take several weeks before a candidate is chosen.
Whoever it is will relax the regulation
Analysts believe that no matter who Trump chooses, the next SEC head is likely to review the major rules set during Gensler's tenure and seek to reduce regulation in the digital currency industry to comply with securities laws.
Gensler was nominated by current US President Biden in February 2021 and was sworn in two months later. Gensler's term ends in 2026, but he said he would step down when the new Republican administration takes office.
Trump promised during his campaign to promote the development of cryptocurrencies and reform the SEC to attract crypto industry funds. However, Gensler has cracked down on the industry since taking office, saying it has ignored SEC regulations. Reuters previously reported that crypto companies have been pushing for the election of an SEC chairman who can abolish cumbersome regulatory policies.
Many analysts believe that Republican SEC Commissioner and cryptocurrency supporter Hester Peirce is a strong candidate for SEC chairman, but sources told the media that she has told some people that she does not want to take the position.
Although Trump has said little about financial policy this time, he has repeatedly promised to cut "burdensome" regulations. Bankers and lobbyists expect the Trump administration to repeal or significantly weaken the Basel Accord that requires big banks to increase their capital adequacy ratios, as well as reduce restrictions on mergers and acquisitions.
FDIC and Federal Reserve will also be reorganized
Trump could fire acting Comptroller of the Currency Michael Hsu on his first day in office, but reshuffling the Fed’s top regulatory post and the Federal Deposit Insurance Corporation’s board could take months.
Among the candidates that the Trump team is considering for inclusion in the list of senior bank regulators is Michelle Bowman, a member of the Federal Reserve Board. She has criticized the capital adequacy ratio increase led by Michael Barr, the Fed's vice chairman for supervision, and advocated for relaxing bank rules and regulations. People familiar with the matter told the media that Barr had said he intended to fulfill his term as vice chairman until 2026, and it is unclear whether Trump will try to remove Barr from his position early.
People familiar with the matter also told the media that Travis Hill, the Republican vice chairman of the FDIC board and a former lawyer for the Senate Banking Committee, is also on the list of candidates for senior bank regulatory positions. Hill also opposes the Basel rules. In addition, Jonathan Gould, a partner at Jones Day law firm and senior deputy director and chief legal counsel of the Office of the Comptroller of the Currency from 2018 to 2021, is also under consideration.
