President Donald Trump has chosen Paul Atkins to chair the Securities and Exchange Commission (SEC). This appointment could signal a shift back to the regulatory approach of the 1990s, under former chairs Richard Breeden and Arthur Levitt. During this era, the SEC focused on vigorously prosecuting objective fraud and implementing common-sense regulations that reduced conflicts of interest.
The 1990s saw a period of market prosperity, with the stock market experiencing rapid growth. The technology sector was booming, driving innovation in areas like the internet. However, the dot-com crash in 2000 and subsequent scandals led to a change in the SEC’s approach. Chairs since then have had more aggressive agendas, driven by economists who gained influence on the commission.
A return to the 1990s style of regulation could be beneficial for investors. The SEC’s focus on fraud prevention and conflict-of-interest reduction would help restore trust in financial markets. While some may object to this approach, it is a valuable lesson from history that prioritizes market integrity over economic or political goals.
Source: https://www.bloomberg.com/opinion/articles/2024-12-05/paul-atkins-will-bring-back-1990s-style-sec-policing