Next SEC Chair? Bets Are on Peirce, Cuban, Or ‘CryptoDad’

It ain’t easy being a political appointee.

Securities and Exchange Commission Chairman Gary Gensler’s future at the agency is in doubt after he’s weathered years of criticism from both sides of the aisle. Democrats like Sen. Elizabeth Warren have called out a sheer lack of enforcement action, while Republicans point to his stance on cryptocurrency as a major concern. Presidential nominee Donald Trump said Gensler is out Day One, and billionaire entrepreneur and Democratic campaign darling Mark Cuban said the commissioner is costing the US revenue.

Musical Chairs

Sure, healthy shade for your regulator is par for the course, but Gensler, who was appointed by President Joe Biden in 2021, seems to have become that houseguest who just can’t take a hint. Experts believe he will likely resign his post after November, a not-uncommon occurrence for political appointees during election cycles. 

“Gary Gensler has worn out his welcome,” said Bill Singer, a securities lawyer with more than four decades’ experience in the brokerage industry. “What was expected was decision-making, and what we got was academia.” 

There are a number of prominent replacements circling the rumor mills. The biggest issue to tackle on either side of the aisle is undoubtedly crypto. Any progress on crypto would require figuring out if it’s a security or commodity — and that requires cooperation from the CFTC. Former head of the Commodity Futures Trading Commission, J. Christopher Giancarlo (a.k.a. “CryptoDad”), has become a talked about name. Here’s a short list of other potential appointments:

• Hester Peirce. There are only two Republican commissioners currently at the SEC, and Peirce has been a staunch critic of Gensler’s approach to cryptocurrency. She even called fines levied on brokers over off-channel communications a “cash cow.” “I’d assume Peirce is in lockstep with Trump,” Singer said. 
• Mark Cuban. The billionaire investor has close ties to Vice President Kamala Harris’ campaign, and told Fox News last month that he would entertain the idea of heading up the SEC. “Harris is going to have to go out and find somebody to tackle crypto in a manner that is acceptable,” Singer said, adding that Cuban would likely weigh in on any SEC appointment.
• Dan Gallagher. Gallagher served as a Republican commissioner at the SEC under former President Barack Obama. He is currently the chief legal officer at the retail brokerage behemoth Robinhood, which offers crypto products to its customers. 
• Heath Tarbert. Tarbert was the head of the CFTC between 2019 and January 2021. “Trump 2.0 is going to immediately work on regulations to allow crypto,” Singer said.

In the Hot Seat. It’s rare for political appointments, especially those at the hotly-criticized SEC, to weather transitions of power or even serve out a complete term. Singer said any choice would inevitably come with political baggage and conflicts of interest, and the role can often seem like a revolving door. But sometimes, just sometimes, the new chair is up to the job. 

“Every so often, we’re surprised,” he said.