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A profile of Wall Street's top cop: SEC Chairman Gary Gensler

STEVE INSKEEP, HOST:

Some other news now. Wall Street's top cop has been talking with NPR. Gary Gensler is the new chairman of the Securities and Exchange Commission. One of his concerns is protecting amateurs in the markets. Millions are trading stocks and cryptocurrencies for the first time. NPR's David Gura reports.

DAVID GURA, BYLINE: For almost a century, the Securities and Exchange Commission has been responsible for regulating markets. Congress created the agency after the Great Depression. And Gary Gensler, the SEC's 33rd chairman, has vowed to take a tough approach to the job.

GARY GENSLER: My grandfather, who I didn't really know, had a old saying. He was a Lithuanian Jew who emigrated here as a 17-year-old. But Ellis Tilles (ph) would say, figures don't lie, but liars sure can figure.

GURA: Gensler first heard that aphorism when he was a kid growing up in Baltimore, but it still resonates with him as he pushes for more transparency. Less than a year into Gensler's term, the SEC has noticeably doubled-down on enforcement of securities laws, with a number of high-profile investigations. Gensler won't talk about individual cases, but we recently learned the SEC is investigating a deal involving former President Trump's social media company. All this enforcement has one objective.

GENSLER: The basic bargain or tenant of our capital markets is that investors should get full and fair information and, too, that they're protected against fraud and manipulation.

GURA: At the heart of Gensler's concerns is amateur investors who are not adequately protected. New apps like Robinhood have opened up the stock market to everyone. Earlier this year, for example, some of them banded together on Reddit to push up the price of so-called meme stocks, including GameStop. And then there's crypto, which has become wildly popular. And the Biden administration feels there's no better person to regulate it than Gary Gensler.

(SOUNDBITE OF ARCHIVED RECORDING)

GENSLER: I've spent a lifetime around the world of finance and money and public policy.

GURA: That's Gensler introducing himself to students at MIT, where he taught a course on cryptocurrency after serving as the chair of the Commodity Futures Trading Commission under President Obama and in other roles in Washington. And now as the new head of the SEC, Gensler has promised he'll unveil new rules across the board as part of an ambitious agenda, from cryptocurrencies to new disclosure rules. James Cox, who teaches securities law at Duke University, is impressed with how much Gensler wants to do in the interest of investor protection.

JAMES COX: I'm staggered, as somebody who's been watching the SEC for half a century now, that the agenda is so robust and so much energy behind it. Things are - it's not actually a wish list but moving forward.

GURA: Cox likens the chairman's role to that of a point guard on a basketball team - he sets the pace, and he calls the plays.

COX: I'm thinking that not only does Gary Gensler work seven days a week, but I think he works 26 hours a day.

GURA: But Gensler's approach to regulation has some investors worried that the U.S. could fall behind its competitors or that new rules could stifle innovation. That's a big challenge for regulators, according to Edmond Shing. He's the chief investment officer at BNP Paribas Wealth Management.

EDMOND SHING: Of course, some regulation is good. You know, protecting consumers is generally a good thing. And regulations that are put in place to protect consumers are never a bad thing. The question is whether governments then overreach themselves.

GURA: Gensler has heard that before. And when I ask him how he strikes the right balance, Gensler brings up every regulator's favorite cliche.

GENSLER: It's sort of like that Goldilocks point, you know, that the porridge is not too hot or not too cold.

GURA: Gensler has been trying to perfect that recipe for years, and he's hopeful that in this job, he'll be able to get it just right.

David Gura, NPR News, New York.

(SOUNDBITE OF TOE'S "TREMOLO AND DELAY") Transcript provided by NPR, Copyright NPR.

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