Former SEC Commissioner Daniel Gallagher visited the studios of CNBC yesterday to share his perspective on the SEC under the Trump administration. Gallagher is one of the names being bandied about as the Republican pick for the SEC Chair. Another possibility is another former Commissioner Paul Atkins who happens to be Gallagher’s boss at Patomak Global Partners and the person leading the charge in guiding the financial appointments for the Trump administration. Both Gallagher and Atkins have been solid supporters of small business, access to capital and innovative new approaches to capital formation.
Gallagher started by pointing out that “personnel is policy” quoting Senator Elizabeth Warren.
The Commission has been operating two Commissioners short after Senator Warren helped to shoot down President Obama’s picks to fill the empty seats. With Chair Mary Jo White departing before the end of the year, Trump will be picking both a new Chair and two Commissioners plus multiple division.
Gallagher points to the fact that the new Chair will get the “power of the agenda”. Gallagher did not mention his preference as to who the new Chair would be but expressed his sentiment that he has a preference to the type of person.
“I think we need to think about de-regulation for the first time,” explained Gallagher.
Asked why the public should embrace a shift away from the rule upon regulation policy approach embraced by the Obama administration, Gallagher replied;
“… Dodd-Frank just piled on the regulation without thinking about the aggregate impact of all that regulation … it is time to take a deep breath and stop doing things, reflect what has been done and then decide how to fix some of these bad things that have been done.”
And what about Congress? The branch of the government that initiates the bulk of the rules which the SEC must enforce;
“It is a case by case analysis. Each rule is different. Some rules will be high on the list for Congress to take on legislatively … some will have to be handled administratively.”
What is the big logjam?
“People forget that the SEC has a statutory mission to facilitate capital formation actively, it hasn’t been done in years and years. It has been regulation, regulation, regulation – mostly Dodd-Frank. Now it is time to get back to the drawing board and say how do we use our existing tools at the Commission, the statutory tools Congress and the President have given us and facilitate capital formation. How do we increase the number of IPOs, how do we get small and emerging companies back into the system so that every American can take part in the upside of the economy.”
Asked about Carl Icahn, the person selected by Trump to help address the massive over-regulation that has encumbered the economy and harmed consumers, Gallagher said;
“He comes from the real world which is great. The President-elect is listening to people who do this stuff for a living instead of the academics and the others who have been prevailing in Washington for so long. I think he is going to bring a free-market perspective…”
The Gallagher interview is a solid foreshadowing of what we can expect from the next iteration of the SEC and how it can take a more active role in helping the economy and smaller companies.
Watch the video below.