The Senate Banking Committee on April 3, 2025, voted 13 to 11 to advance the nomination of Paul Atkins to be the chair of the Securities and Exchange Commission (SEC).
The nomination now heads to the full Senate, and Atkins is closer to becoming the chair of the agency that is undergoing a dramatic transformation during the Trump administration–not only with the overall efforts to streamline the federal government but also because the agency will keep going full steam ahead with deregulatory efforts.
The Senate panel vote was along party lines.
Committee Chair Tim Scott (R-SC) said Atkins will return the SEC to its core mission to “promote capital formation and provide much-needed clarity for digital assets.”
Atkins, chief executive of Washington consulting firm Patomak Global Partners, is expected to continue reversing many of the work that the SEC did under the leadership of Gary Gensler, President Biden’s appointee.
With the support of fellow Republican Commissioner Hester Peirce, Mark Uyeda as interim chief has begun rolling back regulations, dropped lawsuits against crypto firms, and stopped defending the agency’s climate disclosure rule that was being legally challenged.
Democrats Upset
However, Committee Ranking Member Elizabeth Warren (D-MA) lambasted Atkins for what she sees as having poor judgment during the financial crisis when he was an SEC commissioner. He served from 2002 to 2008.
“Mr. Atkins was dead wrong in the lead-up to the worst financial crisis in a generation, and he has 20/0 hindsight about those mistakes,” Warren said before the vote. “He has spent his post-government career helping billionaire scammers like [FTX] CEO Sam Bankman-Fried get even richer.” Bankman-Fried was one of Atkins’ clients.
During a confirmation hearing late March, Warren explained that in 2004 Atkins voted to allow Lehman Brothers and Bear Stearns, which subsequently collapsed during the crisis, to reduce capital buffer by 40%. Then in August 2007 she quoted Atkins as saying “principles of regulatory restraint have been affirmed as the market has continued to demonstrate a capacity to minimize and absorb systemic risk.”
Even after Bear Stearns collapsed in March 2008, Atkins said that “regulators must not stand in the way of investors and market participants sorting this situation out.”
When Warren asked if he was wrong, Atkins responded no. “There were many, as we saw on the congressional oversight panel for TARP [troubled asset relief program], there were many causes for the problems with that subprime mortgage crisis.”
What to Expect When Confirmed
The full Senate is expected to confirm Atkins as chair of the SEC. In addition to continuing with efforts started by Uyeda, Atkins, if confirmed, is likely to loosen up regulations in other areas not yet taken up during the interregnum.
One big area is the oversight of the Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB).
The SEC oversees the FASB, but it is at least in theory more independent.
During Gensler’s tenure, then SEC Chief Accountant Paul Munter exercised more authority in public as well as behind the scenes. The SEC staff had said that independence does not occur in a vacuum.
For example, Munter openly suggested standard-setting topics. That is likely to change, and the SEC might give FASB Chair Richard Jones more free rein.
By contrast, the commission by law more closely supervises the audit regulatory board; its standards and budget must be approved by the commissioners.
PCAOB members are also appointed by the SEC. And during an interview shortly after the presidential election, Robert Hoff, a partner with Wiggin and Dana LLP, said that while it’s impossible to predict the future, “if you look at recent history, the suggestion would be that there will be changes” in board members.
He was making a reference to the wholesale change in PCAOB members first by former SEC Chair Jay Clayton and then by Gensler.
With the prodding by SEC Chair Gensler, the PCAOB pursued an aggressive regulatory agenda, including record-breaking standard-setting activities and record fines on rule violators.
Hoff said that may also change.
While the PCAOB will always want to improve auditing standards, Hoff said that “I don’t know if it will proceed at the same pace.”
The auditing profession had been critical of the PCAOB’s volume and pace of standard-setting activities, citing compliance burdens.
Moreover, enforcement activities could also slow down “for the simple reason that I think many people would believe that whoever is appointed under a Trump administration would be more sort of pro-business, and less in favor of enforcement and heavy regulation,” he said.
However, Hoff emphasized that “regulators are always going to be looking to stop the most egregious conduct… and to bring enforcement actions for things like fraud or obvious misses of financial misconduct.”
This article originally appeared in the April 4, 2025, edition of Accounting & Compliance Alert, available on Checkpoint.
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