WASHINGTON – President-elect Joe Biden should choose Gary Gensler, a former financial regulator and executive at Goldman Sachs Group Inc., to head the Securities and Exchange Commission, according to people familiar with the decision.
Gensler’s appointment would appeal to liberal Democrats who applauded the former regulator’s harsh approach to rulemaking during the Obama administration, when he led the review of derivatives markets required by the 2010 Dodd-Frank Act and oversaw enforcement actions against investment banks accused of manipulating benchmark interest rates.
Gensler’s choice, who declined to comment, was not final and could still change, people said.
As head of the Commodity Futures Trading Commission from 2009 to 2014, Mr. Gensler developed a reputation among his colleagues for his cruel tactics while trying to create a regulatory framework for derivatives, a multi-trillion-dollar market that was largely free from federal oversight. When he left the commission, the set of rules was almost complete, years before other regulators completed their post-crisis work.
It was a surprising turn for the former Goldman executive, who had previously resisted calls for additional derivatives regulation when he served in the Treasury Department under the Clinton administration. The decision not to tightly regulate derivatives in the 1990s was blamed for contributing to the financial crisis a decade later.