SEC Chair Gensler Announces Departure Ahead of Trump Presidency— SEC Lawsuits to ‘Quietly Go Away’?

• The Chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, has officially announced on X that he is resigning in January 2025. 
• In a release published by the Agency, the Gensler-led administration retrieved $2.7 billion for harmed investors through enforcement actions. 

The Chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, has announced that he will be stepping down on January 20, 2025.

On January 20, 2025 I will be stepping down as @SECGov Chair. A thread — Gary Gensler (@GaryGensler) November 21, 2024

Expressing his gratitude to people he directly worked with, Gensler lauded the SEC as a “remarkable Agency” that is driven by the mission to protect investors. Additionally, he emphasized that the Commission is primarily focused on protecting investors, facilitating formation, and ensuring that both investors and issuers “enjoy” a better experience in the market.

Gensler also labeled the staff as true public servants and extended his appreciation to the outgoing US president, Joe Biden, and the Congress.

I thank President Biden for entrusting me with this incredible responsibility. The SEC has met our mission and enforced the law without fear or favor. I’ve greatly enjoyed working with my fellow Commissioners, Allison Herren Lee, Elad Roisman, Hester Peirce, Caroline Crenshaw, Mark Uyeda, and Jaime Lizárraga. I also thank Congress, my colleagues across the U.S. government, and fellow regulators around the world.

Recap of Gensler-Led SEC’s Achievements

Delving deeper into some of his achievements in the past few years, the Commission highlighted in a press release that Gensler’s administration adopted a critical enhancement to the $28 trillion U.S. Treasury markets. To promote the central clearing agent and ensure that the “circumstances in which broker-dealers are exempted from national securities association registration” are narrowed, the SEC adopted rules to lower risks and enhance efficiency across the country.

Under the equity market category, the Agency updated the National Market System to ensure that stocks are subjected to narrower spreads and lower fees. Also, his administration ensured that the settlement circle was shortened to one day.

Under the Enforcement and Examination category, the SEC revealed that the Divisions of Enforcement and Examinations were “steadfast cops on the beat” as they received more than 145,000 tips, referrals, and complaints. In this case, about $1.5 billion was awarded to whistleblowers. During his tenure, about 2,700 enforcement actions were filed by the Commission, and $21 billion was made in penalties and disgorgement orders. Meanwhile, more than $2.7 billion was retrieved for aggrieved investors through enforcement actions between the 2021 and 2024 fiscal year.

According to the official release, 18% of tips, complaints, and referrals received were crypto-related. Meanwhile, the industry comprised less than 1% of the US capital markets.

What Happens to the Lawsuits?

According to Pantera’s Chief Legal Officer Katrina Pagli, the step down of Gensler could see many lawsuits against crypto companies, including Ripple, “quietly going away”. While Katrina believes that most of the cases could be closed through settlements, she also expects the Commission to dismiss and withdraw all their claims.

For the replacement, she hinted that there are rumors that SEC Commissioner Hester Peirce could take over pending the official appointment of a permanent chair.

After this announcement, the crypto market saw a 42% surge in total market capitalization.