McHenry to Chair Gensler: We Have a Constitutional Duty to Conduct Oversight of the Agencies Under Our Jurisdiction and We Will Continue to Do So Aggressively
Washington,
April 18, 2023 -
Today, the House Financial Services Committee, led by Chairman Patrick McHenry (NC-10), is holding a hearing to conduct oversight of the Securities and Exchange Commission. Committee Republicans are committed to holding Chair Gensler accountable for his regulation by enforcement approach towards the digital asset ecosystem, reckless rulemaking agenda, and disregard for the Commission’s capital formation mandate.
Watch Chairman McHenry’s opening remarks here.
Read Chairman McHenry’s opening remarks as prepared for delivery:
“Chair Gensler, welcome to the committee. As you can see, we’re under new management. So, get comfortable, we have a lot to get to today.
“Let’s start with digital assets.
“Under your leadership, the SEC has brought nearly 50 separate enforcement actions against digital asset firms. And now your agency is requesting an additional $78 million to expand your enforcement agenda.
“At the same time, you have refused to provide clarity on whether digital assets offered as part of an investment contract are subject to securities laws. And, more importantly, how these firms should comply with those laws.
“You’re punishing digital asset firms for allegedly not adhering to the law when they don’t know it will apply to them. That’s nonsensical.
“The Administration has said it, the Fed has said, and I’ll say it again: Congress must provide clear rules of the road for the digital asset ecosystem.
“Regulation by enforcement is not sufficient nor sustainable.
“Your approach is driving innovation overseas and endangering American competitiveness.
“The Ranking Member and I have worked for more than a year on this issue, and I will continue that work this Congress. Let me be clear: our goal is to make law.
“We expect you to play a constructive role in that process.
“Next up, we need to discuss your overly aggressive rulemaking agenda.
“In the past two years, the Commission has proposed 53 new rules at a breakneck pace. That’s twice as many rules as your predecessors—Mary Jo White and Jay Clayton—in the same amount of time.
“This raises serious concerns that the rulemaking process is being rushed, undermining the quality of our securities laws and risking negative unintended consequences.
“These concerns have been echoed by senior personnel at your own agency. And they are similar concerns raised while you were at the CFTC.
“Time and time again, you have cut the public out of the rulemaking process with unreasonably short comment periods, even for major rules like your disastrous climate disclosure proposal and equity market structure overhaul.
“You have failed to justify these significant rules with thorough evidence, careful studies, and cost-benefit analysis.
“I look forward to hearing why the Commission is rushing to make such dramatic changes in our markets based on paltry economic analysis and limited public input.
“Finally, it appears you’ve been so busy weaponizing the SEC to push your agenda, you’ve forgotten a key pillar of the Commission’s statutory mission—capital formation.
“Unlike you, this Committee is working to strengthen public markets, help small businesses and entrepreneurs, and increase market access for all investors to ensure the long-term growth and prosperity of this country.
“I’ll close with this: Chair Gensler, your responses to Congressional inquiries have been unacceptable. We have a constitutional duty to conduct oversight of the agencies under our jurisdiction and we will continue to do so aggressively.
“If you continue to thwart this institution by ignoring or providing incomplete responses, we will be left with no choice but to pursue all avenues to compel the information or documents we need—and the American people deserve.”
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