Atkins Defends Previous SEC Tenure During Senate Hearing
Paul Atkins, President Donald Trump’s nominee for Securities and Exchange Commission chair, defended his previous tenure as a commissioner in the years before the 2008 crash while skirting direct answers about his thoughts on reported staffing cuts and office closures at the agency.
Atkins faced the U.S. Senate Banking Committee on Thursday at a confirmation hearing, which was held along with Jonathan Gould (Comptroller of the Currency at the Treasury Department), Luke Pettit (Assistant Treasury Secretary) and U.S. Rep. Marcus Molinaro, who was nominated for Federal Transit Administrator at the Transportation Department.
Committee Ranking Member U.S. Sen. Elizabeth Warren (D-Mass.) continued the line of questioning she’d raised in a letter to Atkins earlier this week, urging him to address his alleged conflicts of interest and his tenure at the SEC between 2002 and 2008.
Warren cited several statements Atkins allegedly made as commissioner in the years before the recession, including claiming shortly after investment bank Bear Sterns’ early 2008 collapse that those advocating for stronger financial regulations “were wallowing in a period of irrational pessimism.”
Warren asked Atkins if he was wrong about touting deregulation, to which he replied that he was not. Later, Atkins told U.S. Sen. Raphael Warnock (D-Ga.) that the problem was “misregulation” rather than too little regulation.
During his opening statement, Atkins also told committee members that regulation should be “smart, effective, and appropriately tailored” to an agency’s authority.
“Unfortunately, lawyers do not speak the same language as businesspeople, or compliance professionals or IT staff,” Atkins said. “It takes knowledge and experience to translate and anticipate issues that inevitably arise among these various professionals tasked with implementing regulations.”
After leaving the SEC, Atkins founded Patomak Capital Partners, a financial consulting firm. Atkins has (at least) a $25 million stake in Patomak and continues to serve as its CEO (though he’s said he’d resign within 90 days if confirmed as SEC Chair). Atkins and his spouse are worth at least $327 million; if confirmed, he’d be one of the wealthiest SEC chairs in decades.
During her questioning, Warren grilled Atkins about his work at Patomak and the potential conflicts between his current position and his desired role as head of the SEC.
“Patomak counts every kind of financial firm subject to the SEC’s rules among its clients; banks, asset managers, brokers, exchanges, fintechs and crypto companies. Your clients pay you north of $1,200 an hour for advice on how to influence regulators like the SEC,” Warren said. “And if you’re confirmed, you’ll be in a prime spot to deliver for all those clients who’ve been paying you millions of dollars for years.”
Warren also demanded Atkins reveal who he would sell Patomak to should he be confirmed. Atkins told Warren he would abide by Office of Governmental Ethics rules; Warren responded that not revealing the buyer could be considered a “pre-bribe” if they had business before the SEC.
Atkins also demurred when asked by U.S. Sen. Lisa Blunt Rochester (D-Del.) about the previously reported potential shuttering of some of the SEC’s regional offices, saying it had been 15 years since he was at the agency and “didn’t know what the management is like … or how best to make sure that were using taxpayer money” efficiently.
Atkins also argued he wanted to “get politics out of the financial markets” when asked by U.S. Sen. Jim Banks (R-Ind.) on the use of environmental, social and governance investment strategies, which Banks characterized as promoting “left-wing social causes” against investors’ wishes.
“Unfortunately, there were some out there who were using other people’s money to try to influence corporations through the distortions of the corporate governance process and that sort of thing,” Atkins said. “So that will end, and we will have protections in place so that money managers and others will be focused on actual investment strategy and not on politics.”
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