Securities and Exchange Commission Chair Gary Gensler, who was aggressive in his oversight of cryptocurrencies and other financial markets, will step down from his post on Jan. 20.
Gensler pushed changes that he said protected investors, but the industry and many Republicans bristled at what they saw as overreach.
President-elect Donald Trump had promised during his campaign that he would remove Gensler. But Gensler on Thursday announced that he would be stepping down from his post on the day that Trump is inaugurated.
Bitcoin has jumped 40% since Trump’s victory. It hit new highs Thursday and was nearing $100,000. Bitcoin moved notably higher still after Gensler's resignation was announced.
Gensler's stance on the rise of cryptocurrencies was captured during a speech he gave during the first year of his chairmanship in 2021 where he described the market as “the Wild West.”
“This asset class is rife with fraud, scams, and abuse in certain applications,” he said in a speech at the Aspen Security Forum. “There’s a great deal of hype and spin about how crypto assets work. In many cases, investors aren’t able to get rigorous, balanced, and complete information.”
Under Gensler, the SEC brought actions against players in the crypto industry for fraud, wash trading and other violations, including as recently as last month when the commission brought fraud charges against three companies purporting to be market makers, along with nine individuals for trying to manipulate various crypto markets.
Yet access to cryptocurrencies became more widespread under Gensler. In January, the SEC approved exchange-traded funds that track the spot price of bitcoin. With such ETFs, investors could get easier access to bitcoin without the huge overlays required to buy it directly.
Gensler, however, acknowledged the SEC had denied earlier, similar applications for such ETFs, including Grayscale Bitcoin Trust, among the first to eventually be approved by the SEC.
“Circumstances, however, have changed,” Gensler said, pointing to a ruling by the U.S. Court of Appeals for the District of Columbia that said the SEC failed to adequately explain its reasoning in rejecting Grayscale’s proposal.
Even there, Gensler made sure not to endorse the merits of bitcoin. He pointed to how ETFs that hold precious metals are tracking prices of things that have “consumer and industrial users, while in contrast bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing.”
Gensler was tested early in his tenure with the rise of the meme stock phenomenon that shocked the financial system in early 2021. Earlier this year, the SEC under Gensler pushed Wall Street to speed up how long it takes for trades of stocks to settle, one of the areas where the commission’s staff recommended changes following the reckoning created by GameStop, one of the first meme stocks.
In the depths of the COVID-19 pandemic, hordes of smaller-pocketed and novice investors suddenly piled into the stock of the struggling video-game retailer. During the height of the frenzy, several brokerages barred customers from buying GameStop after the clearinghouse that settles their trades demanded more cash to cover the increased risk created by its highly volatile price.
In May 2024, new rules meant broker-dealers have to fully settle their trades within one business day of the trade date, down from the previous two.
Critics of the SEC under Gensler have called many of the agency's proposals overly burdensome.
The investment industry, for example, is pushing against a proposal to force some advisers and companies disclose more about their environmental, social and governance practices, otherwise known as ESG. Critics say the proposal is overly complex and increases the risk of investor confusion, while imposing unnecessary burdens and costs on funds.
On Thursday, Gensler stood by the SEC's track record under his direction.
“The staff and the Commission are deeply mission-driven, focused on protecting investors, facilitating capital formation, and ensuring that the markets work for investors and issuers alike," Gensler said in prepared remarks. “The staff comprises true public servants."
Gensler previously served as Chair of the U.S. Commodity Futures Trading Commission, leading the Obama Administration’s reform of the $400 trillion swaps market. He also was senior advisor to U.S. Senator Paul Sarbanes in writing the Sarbanes-Oxley Act (2002) and was undersecretary of the Treasury for Domestic Finance and assistant secretary of the Treasury from 1997-2001.
FILE - Securities and Exchange Commission (SEC) Chair Gary Gensler testifies during a House Financial Services Committee hearing on oversight of the SEC, April 18, 2023, on Capitol Hill in Washington. (AP Photo/Jacquelyn Martin, File)
Former Florida congressman Matt Gaetz has withdrawn as President-elect Donald Trump’s pick for attorney general following scrutiny over a federal sex trafficking investigation.
The Republican's announcement came one day after meeting with senators in an effort to win their support for his confirmation to lead the Justice Department.
Here's the latest:
In other presidential transition news, Trump is urging federal lawmakers to kill a bill that would protect journalists from having to disclose information about anonymous sources or other records obtained during reporting.
The proposal that passed in the U.S. House of Representatives, but is pending in the Senate, also bars the government from requesting data from phone or email providers. The bill includes exceptions such as when there’s a reasonable threat of imminent violence or an act of terrorism.
As of now, only some states grant absolute protection from disclosing sources or other records.
“Republicans must kill this bill!” Trump posted on Truth Social and shared a video from PBS News Hour interviewing the CEO of the Committee to Protect Journalist, Jodie Ginsburg, talking about the proposal.
Last month, The Associated Press, along with more than 100 news outlets and organizations, signed a letter authored by the Reporters Committee for Freedom of the Press asking senators to support the bill.
White House press secretary Karine Jean-Pierre isn’t commenting on Matt Gaetz withdrawing his nomination as president-elect Donald Trump’s attorney general in the new administration.
“We really, truly want to respect the transfer of power,” Jean-Pierre said Thursday during a White House press briefing, explaining her steadfast refusal to comment on Trump personnel moves.
But Jean-Pierre nonetheless used the matter to take a subtle jab at how Trump, who was twice indicted by the federal government, has reacted to federal law enforcement.
“Look, the president has said when it comes to investigation, that department should be independent. there should be no partisanship. There should be no loyalty to one party or the other,” she said. “The loyalty should be to the Constitution, and the loyalty should be to the rule of law.”
Trump has insisted that it was Biden and his lieutenants who weaponized the Justice Department by indicting him for his role in trying to overturn Biden’s 2020 election victory and for hoarding national security documents after Trump left the White House in January 2021. That latter case has been thrown out by a Trump-appointed judge. The former case is still pending.
Taken together, there are a striking number of incidents in which potential high-ranking government officials in Trump’s second administration face allegations of sexual abuse.
Here’s a look at some of the cases:
President-elect Donald Trump: He was found liable by a New York City jury for sexual abuse and defamation and eventually ordered to pay the woman, E. Jean Carroll, $83 million in damages.
Pete Hegseth, nominee for secretary of defense: A woman told police she was sexually assaulted in 2017 by Hegseth after he took her phone, blocked the door to a California hotel room and refused to let her leave, according to a detailed investigative report made public this week. Hegseth told police the encounter had been consensual and denies wrongdoing.
Robert F. Kennedy Jr., nominee for secretary of health and human services: A woman who babysat for Kennedy and his second wife told Vanity Fair magazine he groped her in the late 1990s, when she was 23. Kennedy did not deny the allegation, telling a podcast: “I had a very, very rambunctious youth.” He texted the woman an apology after the story was published.
Linda McMahon, nominee for secretary of education: A lawsuit filed last month alleges McMahon knowingly enabled sexual exploitation of children by a World Wrestling Entertainment employee as early as the 1980s. She denies the allegations.
Elon Musk, Trump’s choice to lead the new Department of Government Efficiency: The CEO of Tesla and SpaceX was accused of sexual misconduct by a flight attendant contracted by SpaceX who worked on his private jet in 2016. He denied the claim.
▶ Read more about the allegations of sexual misconduct
Among those who were seen as contenders before Gaetz was picked is former acting attorney general Matt Whitaker, who Trump chose earlier this week to serve as U.S. ambassador to NATO.
Other names that were floated as potential attorney general nominees include Jeff Jensen, a former U.S. attorney for the Eastern District of Missouri, and Missouri Attorney General Andrew Bailey.
Trump last week chose Todd Blanche, an attorney who led the legal team that defended the Republican at his hush money criminal trial, to serve as the second-highest ranking Justice Department official. Emil Bove, a former federal prosecutor, was chosen to be the principal associate deputy attorney general.
An attorney who represents two women who say they were paid by Gaetz for sex says his clients are “relieved to have this chapter behind them.”
“They’re grateful for the opportunity to move forward with their lives,” said Joel Leppard, whose clients testified before the House Ethics Committee. “They’re hoping that this brings final closure for all the parties involved.”
Leppard revealed earlier this week details about his clients’ testimony to House Ethics Committee to release its report on the Gaetz investigation. Leppard said his clients were paid a total of $10,000 by the congressman. One of his clients testified that she saw Gaetz having sex with a 17-year-old at a party in 2017, while he was in Congress.
Though Gaetz has withdrawn his name from consideration for attorney general, he isn’t Trump’s only appointee in hot water.
A woman told police she was sexually assaulted in 2017 by Pete Hegseth after he took her phone, blocked the door to a California hotel room and refused to let her leave, according to a detailed investigative report made public late Wednesday.
Hegseth, a former Fox News personality and Trump’s nominee to be defense secretary, told police at the time that the encounter had been consensual and denied any wrongdoing, the report said.
Earlier today, Hegseth held a round of private meetings alongside incoming Vice President JD Vance in an attempt to shore up support and told reporters afterward: “The matter was fully investigated and I was completely cleared, and that’s where I’m gonna leave it.”
▶ Read more about the allegations against Hegseth
In his Nov. 13 resignation letter to House Speaker Mike Johnson, Gaetz said, “I hereby resign, as United States Representatives for Florida’s First Congressional District, effective immediately, and I do not intend to take the oath of office for the same office in the 119th Congress, to pursue the position of Attorney General in the Trump Administration.”
He transmitted a similar letter to Florida Gov. Ron DeSantis as the state began a special election process to fill the vacancy.
Attorneys involved in a civil case brought by a Gaetz associate were notified this week that an unauthorized person accessed a file shared between lawyers that included unredacted depositions from a woman who said Gaetz had sex with her when she was 17 and a second woman who says she saw the encounter, according to attorney Joel Leppard.
Leppard said that two women he represents told House Ethics Committee investigators that Gaetz paid them for sex on multiple occasions beginning in 2017 when Gaetz was in Congress.
The files the person was able to access were part of a defamation case filed by a Gaetz associate against the former representative’s onetime political ally Joel Greenberg, who pleaded guilty in 2021 to sex trafficking of a minor, and admitted that he had paid at least one underage girl to have sex with him and other men. The apparent breach was first reported Tuesday by The New York Times.
Gaetz has denied all the allegations.
▶ Read more about the apparent file breach
Trump had announced last week that he’d chosen Todd Blanche, an attorney who’s defended him in some of his criminal cases, to serve as deputy attorney general. That’s the second highest ranking position at the Justice Department.
A former federal prosecutor, Blanche has been a key figure defended him both in the New York hush money criminal trial that ended in a conviction in May, and the federal cases brought by Justice Department special counsel Jack Smith.
Sen. Lindsey Graham of South Carolina said Thursday in a post on X that he believes the now-former congressman “will continue to contribute to our nation’s wellbeing for years to come.”
Graham, a member of the powerful Senate Judiciary Committee, also said he looks forward to working with Trump “regarding future nominees to get this important job up and running.”
The caption of the Instagram photo reads “The end of an era. No one loves America more than this guy.”
The Florida representative was once embroiled in a sex trafficking investigation involving underage girls by the Justice Department, the very department President-elect Trump had tapped him to lead.
Gaetz has vehemently denied any wrongdoing, and in February 2023 said the investigation ended with no federal charges against him.He was also being investigated by the House Ethics panel, but Republicans declined yesterday to release the committee’s findings over objections from Democrats in a split vote.
▶ Read more about the Justice Department’s investigation into Gaetz
He had abruptly resigned from his congressional seat upon being nominated as attorney general amid a long-running House Ethics investigation into allegations of sexual misconduct, which was seen as a way to halt the probe.
The House Ethics panel’s Republicans declined this week to release the committee’s findings into Gaetz over objections from Democrats in a split vote. But the committee did agree to finish its work and is scheduled to meet again Dec. 5 to discuss the matter.
However, Gaetz did win re-election earlier this month for the new Congress which convenes Jan. 3. But it’s unclear if he would take office. There’s also been plans for a special election in Florida for his seat.
“President Trump remains committed to choosing a leader for the Department of Justice who will strongly defend the Constitution and end the weaponization of our justice system,” said Karoline Leavitt, a spokesperson for the Trump-Vance transition team.
In a message on his Truth Social network, Trump also said he was looking forward to seeing what Gaetz will do next after withdrawing as his pick.
“He was doing very well but, at the same time, did not want to be a distraction for the Administration, for which he has much respect,” Trump posted. “Matt has a wonderful future, and I look forward to watching all of the great things he will do!”
Matt Gaetz has just withdrawn as President-elect Donald Trump’s pick for attorney general following continued scrutiny over a federal sex trafficking investigation that cast doubt on the former congressman’s ability to be confirmed as the nation’s chief federal law enforcement officer.
The Florida Republican’s announcement came one day after meeting with senators in an effort to win their support for his confirmation to lead the Justice Department.
Gaetz’s withdrawal is a blow to Trump’s push to install steadfast loyalists in his incoming administration and the first sign that Trump could face resistance from members of his own party.
President-elect Donald Trump's nominee to be attorney general, former Rep. Matt Gaetz, R-Fla., closes a door to a private meeting with Vice President-elect JD Vance and Republican Senate Judiciary Committee members, at the Capitol in Washington, Wednesday, Nov. 20, 2024. (AP Photo/J. Scott Applewhite)
