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Biden Picks Gary Gensler To Head SEC


As financial watchdogs go, President Biden has picked an unusual one to head the Securities and Exchange Commission. He is, in some ways, the ultimate Wall Street insider who made a fortune early in his career. But since then, he's become a tough market policeman, pushing for better protections. NPR's Chris Arnold reports.

CHRIS ARNOLD, BYLINE: Consumer watchdog groups are applauding Biden picking Gary Gensler to head the SEC, but progressives were a lot more skeptical about Gensler in 2009, when he was chosen to be a top regulator back then.


UNIDENTIFIED REPORTER: Senator Bernie Sanders is attempting to block President Obama's nominee, Gary Gensler.

ARNOLD: Before coming to Washington, Gensler worked at Goldman Sachs. And he's a math whiz who made millions of dollars at Goldman and became the firm's youngest partner. So right back after the financial crisis, Bernie Sanders was saying Gensler was the wrong guy to be policing and reforming Wall Street.


BERNIE SANDERS: I would like to see some new and progressive voices, people who don't come from Wall Street, help the president address this very, very difficult crisis.

ARNOLD: But Gensler got confirmed and started giving speeches that likely made financial executives nervous. He was not sounding very warm and fuzzy about the industry he used to work for. Here he is back in 2009.


GARY GENSLER: One year ago, the financial system very much failed the American public. The crisis threatened the savings and livelihood of every American. I speak to you today as someone who spent half my adult life on Wall Street. But to me, the worst financial crisis in 80 years demands the most comprehensive regulatory reform in generations.

ARNOLD: And Gensler got to work doing just that. Salman Banaei is a lawyer and economist who worked under Gensler at what's called the Commodity Futures Trading Commission.

SALMAN BANAEI: It was in the market surveillance section.

ARNOLD: That means trying to ferret out traders who were doing things that were too risky or illegal. He says before Gensler came in, there wasn't actually much active surveillance going on. But with Gensler, that changed.

BANAEI: Which was freaking awesome - you know, we had this amazing data set and free reign to go through it and, you know, try to find bad guys. And as it turned out, it didn't take very long for us to find (laughter) a number of cases and settlements.

ARNOLD: Gensler is a driven, active person. He runs marathons. He's hiked Kilimanjaro, and he brought that kind of energy to his job as a Wall Street cop. Under Gensler, the agency brought a record number of enforcement actions and a record amount of fines for financial institutions.

BANAEI: Any time we would go to Gary with a suggestion to make a rule tougher, as in better protecting the American public, he would agree.

ARNOLD: Gensler was doing all this with an agency that was arguably underfunded and understaffed by Congress, and employee surveys show that morale plunged at the CFTC on Gensler's watch. But he got a lot done. And the guy progressives thought would be too soft on Wall Street was facing questions like this in an interview on PBS with reporter Darren Gersh.


DARREN GERSH: Your critics say, he's the most aggressive regulator in Washington - in fact, risks really hurting American business.

GENSLER: I say that transparent markets and well-regulated markets benefit the American public, benefit American businesses, ultimately help promote jobs.

ARNOLD: Gensler at one point wrote a book criticizing the high cost of mutual funds. That's even though his own twin brother was running one of those big mutual funds. Some industry groups are not commenting on his nomination to run the SEC. But the Futures Industry Association says in a statement that it, quote, "looks forward to continuing to work with him." And those who know Gensler well say, look; he's not some kind of crusader who hates financial firms. He just believes they need up-to-date guardrails and rules and that those need to be enforced. As Gensler likes to say, markets work better with a cop on the beat.

Chris Arnold, NPR News.


NPR correspondent Chris Arnold is based in Boston. His reports are heard regularly on NPR's award-winning newsmagazines Morning Edition, All Things Considered, and Weekend Edition. He joined NPR in 1996 and was based in San Francisco before moving to Boston in 2001.
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