Atkins Likely to Bring Pro-Business, Light Regulatory Touch to SEC, Say Agency Observers

Paul Atkins’ pro-business regulatory philosophy is clear and consistent.

President-elect Donald Trump’s nominee to be the next chairman of the U.S. Securities and Exchange Commission has long held that financial markets should have minimal government intervention and that regulators should not govern market behavior.

Atkins served as SEC commissioner for two terms from 2002 to 2008, where he was a strong free-market proponent. He opposed large penalties levied against companies accused of fraud, arguing large penalties unfairly harm innocent investors.

Atkins dissented in SEC’s decision in 2005 to penalize Qwest Communications $250 million for securities fraud.

“Even after the penalty statement, too often our penalties seem to be justified on little more than that they ‘feel right,'” Atkins said in a 2008 speech.

Atkins opposed SEC’s regulation NMS approved in 2005 and implemented in 2007, a set of rules meant to strengthen equity markets. In his dissent, Atkins argued the regulation NMS harmed innovation and competition, and “sets up roadblocks for our markets.”

Attorney Adrienne Gurley, a Venable partner who defends corporations in SEC actions, said Monday that “I do think his focus and his priorities [as chairman] will keep in mind the financial burden that will be imposed on companies.”

Following his tenure at the SEC, Atkins became a vocal critic of several provisions of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted after the 2008 financial crisis. His targets included statutory rules surrounding derivatives trading, public company disclosure and the Volker Rule meant to reduce risky trades among large banks.

In 2015 testimony to Congress, he criticized Dodd-Frank for ceding too much authority to regulators, adding that the law will mean that “government, and not the markets, will choose the winners and losers.”

Environmental, social and governance investment advocates fear Atkins will bring an end to the SEC’s climate disclosure rule, which requires certain firms to disclose information on a company’s direct or indirect greenhouse gas emissions.

In a recent letter to the SEC, Atkins and other former commissioners called the rule an unlawful expansion of the agency’s authority that “represents a roundabout way of regulating greenhouse gas emissions themselves, by handing a weapon to climate advocates.”

In a 2022 column in the Wall Street Journal, Atkins wrote that the SEC rule “would tee up shifts of capital from fossil-fuel-based industries, such as oil production and heavy manufacturing, toward industries that are supposedly greener.”

Environmental groups and left-leaning consumer rights groups denounced his nomination last week.

“Everyone—and especially investors—should be concerned about Paul Atkins’ role in the widespread concealment of climate-related financial risk in the capital markets and his support of corporate polluters,” Ben Cushing, campaign director for the Sierra Club’s fossil-free finance campaign, said in a statement.

Sen. Elizabeth Warren, expected to be ranking member of the Senate Banking Committee next Congress, was equally suspicious of Atkins.

“I’m concerned about putting at the helm of the SEC a Wall Street lobbyist whose main contribution during the last financial crisis was to protest fines against the giant corporations that defrauded investors,” the Massachusetts Democrat said in a statement Wednesday.

Atkins is currently chief executive officer of Patomak Global Partners, a financial consulting group. An cryptocurrency advocate, Atkins has led efforts to develop best practices for digital assets, according to his company bio, and co-chairs the Token Alliance, a project of the Chamber of Digital Commerce.

He is broadly presumed to usher in an era of crypto deregulation at the the SEC.

“It appears that there’s an alignment in what we understand some of Atkins positions to be with what President-elect Trump has signaled,” said Gurley, of Venable.

Trump, in announcing Atkins as his nominee on Truth Social, stated that Atkins “believes in the promise of robust, innovative capital markets that are responsive to the needs of Investors, & that provide capital to make our Economy the best in the World. He also recognizes that digital assets & other innovations are crucial to Making America Greater than Ever Before.”