Wednesday, January 20, 2021
As President Biden continues to assemble his economic team, reports have emerged that President Biden will nominate Gary Gensler as the next Chair of the SEC. The nomination of Mr. Gensler would clearly signal a more assertive SEC when it comes to both regulation and enforcement. And while it is too early to predict exactly what that will look like, one thing is virtually certain — the SEC will likely adopt a more aggressive approach towards private funds and their managers, resulting in a marked increase in the number of enforcement actions.
In the Short-term
Until Mr. Gensler (or someone else) is confirmed as Chair, we expect that the SEC’s Enforcement program will remain largely unchanged. Pending confirmation of the next Chair, President Biden will likely appoint one of the Democratic Commissioners as acting Chair. It could be several months before Mr. Gensler is confirmed to be the next Chair – Chairman Clayton was nominated on January 20, 2017, but was not confirmed until almost four months later. Moreover, Acting Enforcement Director Marc Berger recently announced that he intends to leave the SEC by the end of the month, and no announcement has been made regarding his successor.