Who is the new SEC Chair Gary Gensler? My conclusion: GARY is GOOD!!

DD 👨‍🔬

I’m a medical student in the US with some time on my hands before graduation. Let’s begin.

GARY GENSLER

In January 2021, Biden appointed Gary Gensler to serve as SEC chair beginning April 19th. An engaging teacher, in the fall of 2018 Gary delivered a series of 24 lectures at the Massachusetts Institute of Technology (MIT) tackling blockchain, finance, central banks, and fiat currency. These are incredible, quality lectures. They’re also publicly accessible; here is the playlist.

Even in 2018, Gary was already acutely aware of how Robbin-the-Hood sells your data to make money (payment for order flow) to US-based hedge funds and high-frequency traders. Here he is talking about RH and Citadel, but at that time that information was not publicly known.

At the Senate hearings, Gary asked “What does it mean when balloons and confetti are dropping, and you have behavioral prompts to get investors to do more transactions on what appears to be a free trading app, but there’s also this payment behind the scenes?”

Gary Prosecuted his FORMER EMPLOYER!

Unlike this scumbag Heath Tarbert who quit as a Commodity Futures Trading Commission (CFTC) regulator and joined Citadel just 27 days later, Gary is the ANTI-sellout. Gary formerly worked as a partner for Goldman Sachs, and THEN became a prosecutor. He went after his former bosses in 2009, where Goldman ultimately paid a $5 Billion fine for their role in the mortgage-induced market meltdown.

Gary was a key reformer who used his position leading the CFTC to go after the banks as the most aggressive regulator in the Obama administration.” Gary is good. According to Forbes, Gary pushed Congress to implement more transparency and stricter rules for the derivatives (options and futures) market. Pay attention, my apes, this gets better.

Before Gary, the CFTC would just wait until complaints were filed and REACT. But with Gary, he takes a PROACTIVE role. At CFTC, Gary was doing what’s called “market surveillance” — trying to sniff out traders doing things that were too risky or illegal. Using trading data, he will actively SEEK OUT the bad players.

How do we know Gary will do the right thing?

To answer this, I point to his lecture on bitcoin as a currency. Like any sustainable currency, Bitcoin relies on a system of LEDGERS. Ledgers are public and observable by all parties, whether involved in the transaction itself or watching from the sidelines. Ledgers are essential components in a fair and open monetary system because it keeps the market honest. However, we know that “dark pool” transactions currently existing in the “free” market and deprives market participants of transaction knowledge. I believe Gary will scrutinize and terminate dark pools, because such non-transparency may be used to manipulate the price of the underlying security via under-the-table transactions “off the ledger.”

Gary also knows all about short selling. In this lecture, Gary explains the concept of borrowing and failure-to-deliver. He critiques the manipulation of BTC which undermined the integrity of the crypto market in the early phases. As we’ve seen from many DD posts here, manipulation is also rampant in stocks. Gary knows and appreciates that a “level of trust” is at the crux of the free market.

WHEN WILL GARY ACT?

According to Reuters, the plan is for Gensler to be seated April 19. Unfortunately, Gary might not be chairman for long. Why? Well, the Senate indicates it will vote for Gensler to serve only the remainder of the former SEC chairman’s term, which ends on June 5. This isn’t set in stone; the banking committee also cleared the reappointment for the second five-year term ending on June 5, 2026, and SEC commissioners can serve up to 18 additional months following the expiration of their term if a successor is not named. Hopefully, Gary will serve as the voice and will of the people and will be retained for the entire duration of a five-year term.

CONCLUSION

Fellow apes, please warmly welcome Professor Gensler to the SEC. If there’s anyone I would trust to wield the power as SEC chairman while closing loopholes, protecting investors, and policing the largest financial center in the world, it’s Gary Gensler.

Key Takeaways: Gary has extensive expertise in the prosecution of big banks and has shown support for market transparency. Without hesitation, I believe he’s the man for the job. Gary is good.

As Gary likes to say: “Markets work best when there’s a cop on the beat.”