The House Financial Services Committee, chaired by Patrick McHenry (NC-10), is holding a hearing today to oversee the Securities and Exchange Commission (SEC). All five SEC Commissioners are testifying together before the Committee for the first time since 2019. This provides an opportunity to hear the diverse viewpoints of the full Commission.
Chairman McHenry opened the session with remarks critical of SEC Chair Gary Gensler's leadership. "Today’s hearing is to conduct oversight of the Securities and Exchange Commission," McHenry said. He emphasized that despite recent actions by Chairman Gensler, it is important to remember that "the SEC is independent and led by a bipartisan commission."
McHenry expressed concerns about Chair Gensler's approach, stating, "Under Chair Gensler, the SEC has become a rogue agency. It routinely exploits its authority to the detriment of our capital markets, innovation, and the American people." He criticized Gensler for overstepping statutory authority and failing to focus on facilitating capital formation.
He noted that courts have overturned several SEC rulemakings and enforcement actions under Gensler's tenure, including rules related to proxy advisory services, private fund disclosures, stock buybacks, Debt Box, Grayscale, and Ripple. "A wide array of federal judges—appointed by Presidents from both parties—have noted the lawless nature of Chair Gensler’s tenure," McHenry said.
Furthermore, McHenry highlighted bipartisan opposition in Congress against some of Gensler's initiatives. "More than 250 Members of Congress from both parties have signed dozens of letters opposing actions taken by the SEC," he stated.
McHenry also pointed out that while his committee has passed over twenty bipartisan bills aimed at strengthening public markets and helping small businesses access capital, Chair Gensler has not proposed any rules focused exclusively on capital formation. "It appears only at Chair Gensler’s SEC is capital formation a partisan priority," he remarked.
In May, the House passed FIT21 to create clear rules for digital assets and provide consumer protections. More than two-thirds of the House supported this measure, including 71 Democrats. However, according to McHenry, Chair Gensler continues to favor regulation by enforcement rather than regulatory clarity.
"Bipartisan opposition in Congress, continued rejection by the courts, and notably, the end of Chevron Deference should serve as a warning to Chair Gensler," McHenry concluded. He warned against unilateral expansions of authority in areas such as digital assets or climate policy: "With a record like this, it’s clear Chair Gensler’s legacy will be defined by turning the once proud institution of the SEC into a rogue agency."
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