Senate weighing Biden's choice for SEC head

Washington: President Joe Biden's choice to head the Securities and Exchange Commission is coming before a Senate panel for his confirmation hearing at a moment when a roiling stock-trading drama has spurred clamour for tighter regulation of Wall Street. Gary Gensler, a chairman of the Commodity Futures Trading Commission during the Obama administration, has experience as a tough markets regulator during the financial crisis. More recently he has been in the academic world. Biden's selection of Gensler to lead the SEC signals a goal of turning the Wall Street watchdog agency toward an activist role after a deregulatory stretch during the Trump administration.

The Senate Banking Committee is weighing Gensler's confirmation in a virtual hearing Tuesday. Also being vetted and questioned is Rohit Chopra, a member of the Federal Trade Commission who is Biden's nominee to lead the Consumer Financial Protection Bureau. Gensler is promising to work toward strengthening transparency and accountability in the markets. That will enable people "to invest with confidence and be protected from fraud and manipulation," he said in written testimony prepared for the hearing.

"It means promoting efficiency and competition, so our markets operate with lower costs to companies and higher returns to investors. ... And above all, it means making sure our markets serve the needs of working families." The trading frenzy in shares of the struggling video-game retailer GameStop lifted their price 1,600 per cent in January, though they later fell back to Earth after days of wild price swings. A number of big hedge funds had bet that GameStop stock would fall, only to be thwarted by small investors who banded together on social media with a wave of buying that sent the price up.

The saga was portrayed as a victory of ordinary investors over Wall Street giants. But some lawmakers charged that the online trading platform Robinhood acted to favour its big Wall Street clients when it blocked its customers on January 28 from buying GameStop shares. The SEC is investigating. Treasury Secretary Janet Yellen convened a meeting of top federal regulators to discuss the trading turbulence and whether the way the market operates may hurt individual investors. Allison Herren Lee, the acting SEC chair, has said the agency is examining the role that short-selling may have played in GameStop's extreme stock moves, as well as potential stock manipulation and whether companies issuing stocks are adequately disclosing risks to investors.