Gary Scott Gensler (born October 18, 1957) is an American former government official and former

investment banker Investment banking is an advisory-based financial service for institutional investors, corporations, governments, and similar clients. Traditionally associated with corporate finance, such a bank might assist in raising financial capital by unde ...

who served as the chair of the

U.S. Securities and Exchange Commission The United States Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street crash of 1929. Its primary purpose is to enforce laws against market m ...

(SEC) from 2021 to 2025. Gensler previously worked for

Goldman Sachs The Goldman Sachs Group, Inc. ( ) is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many internationa ...

and led the Biden–Harris transition's Federal Reserve, Banking, and Securities Regulators agency review team. Before his appointment, he was professor of Practice of Global Economics and Management at the

MIT Sloan School of Management The MIT Sloan School of Management (branded as MIT Sloan) is the business school of the Massachusetts Institute of Technology, a private university in Cambridge, Massachusetts. MIT Sloan offers bachelor's, master's, and doctoral degree progra ...

. Gensler served as the 11th chairman of the

Commodity Futures Trading Commission The Commodity Futures Trading Commission (CFTC) is an Independent agencies of the United States government, independent agency of the US government created in 1974 that regulates the U.S. derivatives markets, which includes futures contract, fut ...

, under President

Barack Obama Barack Hussein Obama II (born August 4, 1961) is an American politician who was the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, he was the first African American president in American history. O ...

, from May 26, 2009, to January 3, 2014. He was the

Under Secretary of the Treasury for Domestic Finance The under secretary of the treasury for domestic finance is a high-ranking position within United States Department of the Treasury that reports to, advises, and assists the secretary of the treasury and the deputy secretary of the treasury. The ...

(1999–2001), and the

Assistant Secretary of the Treasury for Financial Markets The Assistant Secretary of the Treasury for Financial Markets is an official in the United States Department of the Treasury who heads the Office of Financial Markets. According to U.S. statute, there are ten Assistant Secretaries of the Treas ...

(1997–1999). Before his career in the federal government, Gensler worked at

, where he was a partner and co-head of finance. Gensler also served as the CFO for the Hillary Clinton 2016 presidential campaign. President

Joe Biden Joseph Robinette Biden Jr. (born November 20, 1942) is an American politician who was the 46th president of the United States from 2021 to 2025. A member of the Democratic Party (United States), Democratic Party, he served as the 47th vice p ...

nominated Gensler to serve as 33rd chair of the

. He succeeded SEC Acting Chair Allison Lee.

Early life and education

Gensler was born into a Jewish family in

Baltimore, Maryland Baltimore is the List of municipalities in Maryland, most populous city in the U.S. state of Maryland. With a population of 585,708 at the 2020 United States census, 2020 census and estimated at 568,271 in 2024, it is the List of United States ...

, one of five children of Jane (née Tilles) and Sam Gensler. Sam Gensler was a cigarette and pinball machine vendor to local bars, and he provided Gensler with his first exposure to the real-world side of

finance Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...

when Sam would take Gensler to the bars of Baltimore to count nickels from the

vending machine A vending machine is an automated machine that dispenses items such as snacks, beverages, cigarettes, and lottery tickets to consumers after cash, a credit card, or other forms of payment are inserted into the machine or payment is otherwise m ...

s. Gensler graduated from Pikesville High School in 1975, where he was later given a Distinguished Alumnus award. Gensler graduated with a degree in economics, ''

summa cum laude Latin honors are a system of Latin phrases used in some colleges and universities to indicate the level of distinction with which an academic degree has been earned. The system is primarily used in the United States. It is also used in some Sout ...

'', after three years at the

Wharton School The Wharton School ( ) is the business school of the University of Pennsylvania, a private Ivy League research university in Philadelphia. Established in 1881 through a donation from Joseph Wharton, a co-founder of Bethlehem Steel, the Wharton ...

at the

University of Pennsylvania The University of Pennsylvania (Penn or UPenn) is a Private university, private Ivy League research university in Philadelphia, Pennsylvania, United States. One of nine colonial colleges, it was chartered in 1755 through the efforts of f ...

, followed by a master's in business administration the following year. Gensler's identical twin brother also studied at the University of Pennsylvania. As an undergraduate, Gensler joined the University of Pennsylvania crew as a

coxswain The coxswain ( or ) is the person in charge of a boat, particularly its navigation and steering. The etymology of the word gives a literal meaning of "boat servant" since it comes from ''cock'', referring to the wiktionary:cockboat, cockboat, a ...

, dropping his weight to 112 pounds to keep the boat at its proper weight.

Business career

In 1979, Gensler joined

, where he spent 18 years. At 30, Gensler became one of the youngest persons to have made partner at the firm at the time. He spent the 1980s working as a top

mergers and acquisitions Mergers and acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorpt ...

banker, having assumed responsibility for Goldman's efforts in advising media companies. He subsequently made the transition to trading and finance in

Tokyo Tokyo, officially the Tokyo Metropolis, is the capital of Japan, capital and List of cities in Japan, most populous city in Japan. With a population of over 14 million in the city proper in 2023, it is List of largest cities, one of the most ...

, where he directed the firm's

fixed income Fixed income refers to any type of investment under which the borrower or issuer is obliged to make payments of a fixed amount on a fixed schedule. For example, the borrower may have to pay interest at a fixed rate once a year and repay the pr ...

and

currency A currency is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general definition is that a currency is a ''system of money'' in common use within a specific envi ...

trading. While at Goldman Sachs, Gensler led a team that advised the

National Football League The National Football League (NFL) is a Professional gridiron football, professional American football league in the United States. Composed of 32 teams, it is divided equally between the American Football Conference (AFC) and the National ...

in capturing the then-most lucrative deal in television history, when the NFL secured a $3.6 billion deal selling television sports rights. Gensler's last role at Goldman Sachs was co-head of finance, responsible for controllers and treasury worldwide. Gensler left Goldman after 18 years when he was nominated by President

Bill Clinton William Jefferson Clinton (né Blythe III; born August 19, 1946) is an American politician and lawyer who was the 42nd president of the United States from 1993 to 2001. A member of the Democratic Party (United States), Democratic Party, ...

and confirmed by the

U.S. Senate The United States Senate is a chamber of the bicameral United States Congress; it is the upper house, with the U.S. House of Representatives being the lower house. Together, the Senate and House have the authority under Article One of the ...

to be the Assistant Secretary of the Treasury. Gensler served on the board of for-profit university Strayer Education, Inc. from 2001 to 2009.

Public service

Treasury Department

Gensler served in the

United States Department of the Treasury The Department of the Treasury (USDT) is the Treasury, national treasury and finance department of the federal government of the United States. It is one of 15 current United States federal executive departments, U.S. government departments. ...

as Assistant Secretary for Financial Markets from 1997 to 1999, then as Undersecretary for Domestic Finance from 1999 to 2001. As Assistant Secretary, Gensler served as a senior advisor to the

Secretary of the Treasury The United States secretary of the treasury is the head of the United States Department of the Treasury, and is the chief financial officer of the federal government of the United States. The secretary of the treasury serves as the principal a ...

in developing and implementing the federal government's policies for debt management and the sale of U.S. government securities. In 1999 and 2000, under then-Treasury Secretary Lawrence Summers, Gensler fought for passage of the Commodity Futures Modernization Act, which exempted over-the-counter derivatives from regulation. As Undersecretary of the Treasury for Domestic Finance, Gensler advised and assisted Treasury Secretaries

Robert Rubin Robert Edward Rubin (born August 29, 1938) is an American retired banking executive, lawyer, and former Federal government of the United States, government official. He served as the 70th United States Secretary of the Treasury, U.S. secretary o ...

and

Lawrence Summers Lawrence Henry Summers (born November 30, 1954) is an American economist who served as United States Secretary of the Treasury from 1999 to 2001 and as the director of the National Economic Council from 2009 to 2010. He also served as presiden ...

on aspects of domestic finance, including formulating policy and legislation in the areas of financial institutions, public debt management,

capital markets A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold. Capital markets channel the wealth of savers t ...

, government financial management services, federal lending, fiscal affairs, government sponsored enterprises, and community development. While serving at the Treasury Department, Gensler was awarded the agency's highest honor, the Alexander Hamilton Award, for his service.

Sarbanes-Oxley

In 2001, Gensler joined the staff of U.S. Senator

Paul Sarbanes Paul Spyros Sarbanes (; February 3, 1933 – December 6, 2020) was an American politician and attorney from Maryland. A member of the Democratic Party (United States), Democratic Party, he served in both chambers of the United States Congr ...

, chairman of the Senate Banking Committee, as a senior advisor and helped write the Sarbanes-Oxley Act, which tightened accounting standards in the wake of the

Enron Enron Corporation was an American Energy development, energy, Commodity, commodities, and services company based in Houston, Texas. It was led by Kenneth Lay and developed in 1985 via a merger between Houston Natural Gas and InterNorth, both re ...

and

WorldCom MCI, Inc. (formerly WorldCom and MCI WorldCom) was a telecommunications company. For a time, it was the second-largest long-distance telephone company in the United States, after AT&T. WorldCom grew largely by acquiring other telecommunicatio ...

scandals.

CFTC

Then-President-elect

announced his intent to nominate Gensler to serve as the 11th chairman of the CFTC on December 18, 2008. His nomination was officially sent to the U.S. Senate on January 20, 2009. After some initial opposition to Gensler's nomination amongst the progressive members of the Democratic caucus, Gensler was approved by the U.S. Senate in an 88–6 confirmation vote. Gensler was sworn in on May 26, 2009, pledging to work to "urgently close the gaps in our laws to bring much-needed transparency and regulation to the over-the-counter derivatives market to lower risks, strengthen market integrity and protect investors". Gensler was described as "one of the leading reformers after the financial crisis".

Swaps

During Gensler's tenure at the CFTC, he worked closely with the Obama Administration,

United States Congress The United States Congress is the legislature, legislative branch of the federal government of the United States. It is a Bicameralism, bicameral legislature, including a Lower house, lower body, the United States House of Representatives, ...

and other regulators to transform the $400 trillion

financial derivatives In finance, a derivative is a contract between a buyer and a seller. The derivative can take various forms, depending on the transaction, but every derivative has the following four elements: # an item (the "underlier") that can or must be bou ...

markets that were at the center of the 2008 financial crisis. Upon becoming chairman, Gensler began leading the Obama Administration's effort "to start policing the Wild West of finance: the murky market for over-the-counter derivatives". When the Treasury Department released draft legislation to bring regulatory oversight to the swaps market, Gensler sent a letter to Congress arguing that the proposal did not go far enough. By the spring of 2010, the momentum in Congress was toward Gensler's vision for derivatives oversight, and Congress passed comprehensive reform as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010. After the passage of the Dodd-Frank Act, Gensler led the CFTC's effort to write the rules required to regulate the swaps markets. He oversaw the agency as it wrote 68 new rules, orders and guidances and as its reach extended from a $35 trillion futures market to a $400 trillion swaps market. Under Gensler, the bipartisan commission reached unanimous votes to approve more than 70 percent of the agency's rulemakings. By the time Gensler left the CFTC in January 2014, the agency was near completion of the rule-writing process to implement the Dodd-Frank Act.

Enforcement and Libor investigation

Gensler led a revitalization of the enforcement division of the agency, most notably in its prosecution of an enforcement case regarding manipulation of

Libor The London Inter-Bank Offered Rate (Libor ) was an interest rate average calculated from estimates submitted by the leading Bank, banks in London. Each bank estimated what it would be charged were it to borrow from other banks. It was the prim ...

, the London interbank offered rate. Early in his tenure, Gensler listened to tape recordings of two

Barclays Barclays PLC (, occasionally ) is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services ...

employees as they discussed plans to report false

interest rates An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, ...

in an effort to manipulate Libor. Libor is the average interest rate estimated by leading banks in London that the average leading bank would be charged if borrowing from other banks. It is used as a reference rate for many financial products, including adjustable rate mortgages, student loans, and car payments. "A driving force behind the latest crackdown tied to LIBOR", Gensler worked with enforcement division director David Meister and his team to lead the investigative effort and brought charges against five financial institutions for the manipulation of Libor and other benchmark interest rates, resulting in more than $1.7 billion in penalties. Barclays alone paid $450 million in fines as a result of the Libor investigation. Gensler has called Libor "unsustainable" and argued that it should be replaced as a benchmark rate.

MF Global

Gensler was Chair of the CFTC during the collapse of

MF Global MF Global Holdings Ltd., formerly known as Man Financial, was a major global financial derivatives broker, or commodities brokerage firm that went bankrupt in 2011. MF Global provided exchange-traded derivatives, such as futures and options ...

. Gensler recused himself from the case, because of his previous relationship with MF Global's Chairman and CEO,

Jon Corzine Jon Stevens Corzine ( ; born January 1, 1947) is an American financial executive and retired politician who served as a United States Senator from New Jersey from 2001 to 2006, and the 54th governor of New Jersey from 2006 to 2010. Corzine ran f ...

Frankel Fiduciary Prize

For his work to reform the financial regulatory system, The Institute for the Fiduciary Standard awarded Gensler with the 2014 Tamar Frankel Fiduciary Prize.

Maryland Financial Consumer Protection Commission

In 2017, Gensler was selected by Maryland Senate President Thomas V. Miller Jr. and House Speaker Michael E. Busch to serve as Chairman of the Maryland Financial Consumer Protection Commission, which assessed the impact of potential changes to federal financial industry laws, regulations, budgets, and policies on the state. Under Gensler's leadership, the Commission recommended changes to State law to enhance consumer financial protections, including enhancing standards of care, clarifying State law to set standards for student loan servicers, and protecting Maryland buyers of manufactured homes. In 2018, student loan legislation recommended by the Commission established a student loan ombudsman, added the federal Military Lending Act and the federal Servicemembers Civil Relief Act to state law, increased civil monetary penalties for violations, and codified some modifications on debt collection laws. In 2019, the state enacted additional Commission-recommended legislation to create a Student Borrower Bill of Rights to protect students from predatory practices.

SEC

In November 2020, Gensler was named a volunteer member of the Joe Biden presidential transition Agency Review Team to support transition efforts related to the

Federal Reserve The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a series of ...

, the

Federal Deposit Insurance Corporation The Federal Deposit Insurance Corporation (FDIC) is a State-owned enterprises of the United States, United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks. The FDIC was cr ...

, the

National Credit Union Administration The National Credit Union Administration (NCUA) is an American government-backed insurer of Credit unions in the United States, credit unions in the United States, one of two agencies that provide deposit insurance to depositors in U.S. deposi ...

, and the

Securities and Exchange Commission The United States Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street crash of 1929. Its primary purpose is to enforce laws against market m ...

. On March 11, 2021, his nomination was reported out of the Senate Banking, Housing and Urban Development Committee by a vote of 14–10. On April 14, 2021, his nomination was confirmed in the

Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...

by a vote of 53–45 to fill former chair Jay Clayton's term expiring in June 2021. On April 19, 2021, the Senate confirmed Gensler to a 5-year term through 2026 by a vote of 54–45. However, Gensler announced on November 21, 2024 that he would step down at the end of Biden's term effective January 20, 2025.

Cryptocurrency

On September 14, 2021, Gensler testified before the U.S. Senate Banking, Housing, and Urban Affairs Committee that the SEC was in need of large staffing increases to address regulatory concerns related to cryptocurrencies and other digital assets, and Gensler likened the cryptocurrency market to a "

Wild West The American frontier, also known as the Old West, and popularly known as the Wild West, encompasses the geography, history, folklore, and culture associated with the forward wave of American expansion in mainland North America that bega ...

". On September 21, Gensler remarked to ''

The Washington Post ''The Washington Post'', locally known as ''The'' ''Post'' and, informally, ''WaPo'' or ''WP'', is an American daily newspaper published in Washington, D.C., the national capital. It is the most widely circulated newspaper in the Washington m ...

'' that most cryptocurrency projects dealing with securities should fall under the regulatory purview of the SEC, though the

(CFTC), of which he was a former chair, was better suited for some others. On October 5, Gensler testified before the U.S. House Financial Services Committee that the SEC had no plans to ban cryptocurrencies. On October 15, the SEC approved the first

bitcoin Bitcoin (abbreviation: BTC; Currency symbol, sign: ₿) is the first Decentralized application, decentralized cryptocurrency. Based on a free-market ideology, bitcoin was invented in 2008 when an unknown entity published a white paper under ...

futures

exchange-traded fund An exchange-traded fund (ETF) is a type of investment fund that is also an exchange-traded product, i.e., it is traded on stock exchanges. ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or comm ...

(ETF) in the United States after Gensler announced support for doing so the previous August. Gensler is opposed to approving

pure play A pure play company focuses solely on a particular product or activity. Investing in a pure play company can be considered as investing in a particular commodity or product of a company. Pure play firms either specialize in a specific niche, or ha ...

bitcoin ETFs due to bitcoin remaining subject to

fraud In law, fraud is intent (law), intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Fraud can violate Civil law (common law), civil law (e.g., a fraud victim may sue the fraud perpetrato ...

and

market manipulation In economics and finance, market manipulation occurs when someone intentionally alters the supply or demand of a security to influence its price. This can involve spreading misleading information, executing misleading trades, or manipulating ...

. After a period of high anticipation and speculation from financial news outlets and markets about the SEC approval of a spot bitcoin ETF, at 4:11pm ET on January 9, 2024, a post was published to the SEC's X account announcing the approval of spot bitcoin ETFs. By 4:26 pm, SEC chair Gary Gensler ha
issued a retraction
and said the agency's account had been "compromised," and that an "unauthorized tweet was posted." In the minutes after the fake post was published, the price of bitcoin jumped around 2.5% and led to an overall $40 billion swing in the combined value of bitcoin in circulation. ''

The Economist ''The Economist'' is a British newspaper published weekly in printed magazine format and daily on Electronic publishing, digital platforms. It publishes stories on topics that include economics, business, geopolitics, technology and culture. M ...

'' identified the risks presented by

decentralized finance Decentralized finance (often stylized as DeFi) provides financial instruments and services through smart contracts on a programmable, permissionless blockchain. This approach reduces the need for intermediaries such as brokerages, exchanges, or ...

and crypto-assets valued at $2.5 trillion as a challenge for Gensler in 2022, and noted his experience in teaching blockchain technology. On April 4, 2022, Gensler announced that the SEC would begin to register and regulate cryptocurrency exchanges at a

University of Pennsylvania Law School The University of Pennsylvania Carey Law School (also known as Penn Carey Law, or Penn Law; previously University of Pennsylvania Law School) is the law school of the University of Pennsylvania, a private Ivy League research university in Phi ...

students association conference. On May 11, Gensler stated in an interview with

Bloomberg News Bloomberg News (originally Bloomberg Business News) is an international news agency headquartered in New York City and a division of Bloomberg L.P. Content produced by Bloomberg News is disseminated through Bloomberg Terminals, Bloomberg T ...

that cryptocurrency exchanges were market making against the interests of their customers after warning the U.S. House Appropriations Subcommittee on Financial Services and General Government that cryptocurrency exchanges were engaged in

front running Front running, also known as tailgating, is the practice of entering into an equity (stock) trade, option, futures contract, derivative, or security-based swap to capitalize on advance, nonpublic knowledge of a large ("block") pending transactio ...

the previous May. Following testimony before the U.S. House Appropriations Subcommittee on Financial Services and General Government on May 18, Gensler warned in a post-hearing press conference that many cryptocurrencies were going to fail and expressed concern that it could undermine confidence in the traditional financial markets. On June 7, U.S. Senators

Kirsten Gillibrand Kirsten Elizabeth Gillibrand (; ; born December 9, 1966) is an American lawyer and politician serving as the Seniority in the United States Senate, junior United States Senate, United States senator from New York (state), New York since 2009 ...

( D– NY) and

Cynthia Lummis Cynthia Marie Lummis Wiederspahn ( ; born September 10, 1954) is an American attorney and politician serving as the Seniority in the United States Senate, junior United States Senate, United States senator from Wyoming since 2021. A member of t ...

( R– WY) introduced a bill in the 117th U.S. Congress to create a regulatory framework for cryptocurrencies that would treat most digital assets as

commodities In economics, a commodity is an economic good, usually a resource, that specifically has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. Th ...

subject to oversight from the CFTC and would not have cryptocurrencies subject to oversight from the SEC unless a cryptocurrency's holders were entitled to the same privileges as corporate investors. At a conference hosted by ''The Wall Street Journal'' on June 14, Gensler expressed concern that the Lummis-Gillibrand bill could inadvertently undermine stock market and mutual fund protections, noted that cryptocurrency companies were already engaging in behaviors overseen by the SEC, and argued that some digital assets are securities necessitating oversight from the SEC rather than commodities (even if the overwhelming majority of tokens offered by cryptocurrency exchanges are commodities). On January 12, 2023, the SEC filed a complaint in Southern New York U.S. District Court that both

Genesis Genesis may refer to: Religion * Book of Genesis, the first book of the biblical scriptures of both Judaism and Christianity, describing the creation of the Earth and of humankind * Genesis creation narrative, the first several chapters of the Bo ...

and Gemini of offering and selling unregistered securities. On November 28, 2024, Finance Research Letters published research by economists indicating that unexpected SEC regulatory interventions caused prolonged negative reactions in crypto-asset markets.

Financial regulation

On May 6, 2021, Gensler testified before the U.S. House Financial Services Committee about the

GameStop short squeeze In January 2021, a short squeeze of the stock of the American video game retailer GameStop and other Security (finance), securities took place, causing major financial consequences for certain hedge funds and large losses for Short (finance), ...

, Robinhood Markets, Archegos Capital Management, market concentration among market makers for

payment for order flow Payment for order flow (PFOF) is the compensation that a stockbroker receives from a market maker in exchange for the broker routing its clients' trades to that market maker. The market maker profits from the bid-ask spread and rebates a portion of ...

conflict of interest A conflict of interest (COI) is a situation in which a person or organization is involved in multiple wikt:interest#Noun, interests, financial or otherwise, and serving one interest could involve working against another. Typically, this relates t ...

in best execution for trades with PFOF, trading

gamification Gamification is the process of enhancing systems, services, organisations and activities through the integration of game design elements and principles in non-game contexts. The goal is to increase user engagement, motivation, competition and ...

in mobile trading apps and

high-frequency trading High-frequency trading (HFT) is a type of algorithmic trading in finance characterized by high speeds, high turnover rates, and high order-to-trade ratios that leverages high-frequency financial data and electronic trading tools.Lin, Tom C. W. " ...

, the SEC consolidated

audit trail An audit trail (also called audit log) is a security-relevant chronological record, set of records, and/or destination and source of records that provide documentary evidence of the sequence of activities that have affected at any time a specific ...

data security Data security or data protection means protecting digital data, such as those in a database, from destructive forces and from the unwanted actions of unauthorized users, such as a cyberattack or a data breach. Technologies Disk encryption ...

, usage of social media and the internet in market manipulation, and ESG disclosure rules (including those proposed by the Task Force on Climate Related Financial Disclosures led by former

New York City Mayor The mayor of New York City, officially mayor of the City of New York, is head of the executive branch of the government of New York City and the chief executive of New York City. The mayor's office administers all city services, public property, ...

Michael Bloomberg Michael Rubens Bloomberg (born February 14, 1942) is an American businessman and politician. He is the majority owner and co-founder of Bloomberg L.P., and was its CEO from 1981 to 2001 and again from 2014 to 2023. He served as the 108th mayo ...

). On May 25, U.S. Senators Elizabeth Warren (D–MA) and Bernie Sanders (I–VT) sent a letter to Gensler urging the SEC to remove and replace the sitting members of the

Public Company Accounting Oversight Board The Public Company Accounting Oversight Board (PCAOB) is a nonprofit corporation created by the Sarbanes–Oxley Act of 2002 to oversee the audits of US-listed public companies. The PCAOB also oversees the audits of broker-dealers, including co ...

(PCAOB), arguing that Trump Administration appointees had politicized the agency and compromised its independence. On June 4, the SEC voted to remove William Duhnke as PCAOB Chair and began an investigation on June 17 of his handling of internal complaints while serving as PCAOB Chair. On June 9, Gensler announced that the SEC would review market structure following the GameStop short squeeze and the AMC Entertainment Holding, Inc. meme stock short squeeze, and Gensler signaled in an interview with ''

Barron's ''Barron's'' (stylized in all caps) is an American weekly magazine and newspaper published by Dow Jones & Company, a division of News Corp, since 1921. Founded as ''Barron's National Financial Weekly'' in 1921 by Clarence W. Barron (1855–19 ...

'' the following August that a complete ban on payment for order flow was being considered by the review. Speaking at ''The Wall Street Journal'' CFO Network event on June 7, Gensler emphasized the need for new restrictions and rules to reduce the risk of improper insider trading. On June 30, Robinhood Markets agreed to pay $70 million to settle a lawsuit filed by the

Financial Industry Regulatory Authority The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization (SRO) that regulates member brokerage firms and exchange markets. FINRA is the successor to the National Associati ...

(FINRA) that alleged that the company had misled its customers, approved ineligible and inexperienced traders for options strategies, and did not supervise its technology properly to prevent outages. On July 29, Robinhood Markets launched an IPO for its stock on the

Nasdaq The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...

. On August 6, the SEC approved new rules implemented by

Nasdaq, Inc. Nasdaq, Inc. is an American multinational financial services corporation that owns and operates three stock exchanges in the United States: the namesake Nasdaq stock exchange (on which it is also listed), the Philadelphia Stock Exchange, and ...

requiring that companies listed on its exchanges to include at least one female member on their boards of directors and at least one racial minority or LGBTQ board member and to require disclosure of statistics measuring the diversity of their board membership. This rule was struck down by the courts who determined the SEC overstepped its role. On August 27, the SEC launched a review of strategies and practices used by online brokers and investment advisors that promote user engagement with trading gamification. On December 2, the SEC finalized a rule to implement the Holding Foreign Companies Accountable Act. In response to record stock sales by CEOs and other corporate executives that year, Gensler proposed an agency rule for a mandatory 120-day window for corporate executives who are changing existing or adopting new portfolio managements plans on December 15. On January 27, 2022, Southern Florida U.S. District Court Judge Cecilia Altonaga dismissed a lawsuit filed by investors against Robinhood Markets for acting negligently during the GameStop short squeeze. On February 11, the SEC met to discuss more than 50 proposed rules changes (focused primarily on

hedge fund A hedge fund is a Pooling (resource management), pooled investment fund that holds Market liquidity, liquid assets and that makes use of complex trader (finance), trading and risk management techniques to aim to improve investment performance and ...

s and

private equity Private equity (PE) is stock in a private company that does not offer stock to the general public; instead it is offered to specialized investment funds and limited partnerships that take an active role in the management and structuring of the co ...

) including a requirement that the disclosure documents of stock corporations must include a written statement of company

cybersecurity Computer security (also cybersecurity, digital security, or information technology (IT) security) is a subdiscipline within the field of information security. It consists of the protection of computer software, systems and networks from thr ...

risk management Risk management is the identification, evaluation, and prioritization of risks, followed by the minimization, monitoring, and control of the impact or probability of those risks occurring. Risks can come from various sources (i.e, Threat (sec ...

policies and disclosure of any

cyberattack A cyberattack (or cyber attack) occurs when there is an unauthorized action against computer infrastructure that compromises the confidentiality, integrity, or availability of its content. The rising dependence on increasingly complex and inte ...

s. On May 18, Gensler testified before the U.S. House Appropriations Subcommittee on Financial Services and General Government requesting an even greater increase to its appropriation in the 2023 U.S. federal budget than the 8 percent increase proposed by President Biden. On June 8, Gensler announced rules changes to require that market makers disclose more data about payments for order flow (PFOF) and the timing for the best execution of trades, as well as to require direct competition among

stockbroker A stockbroker is an individual or company that buys and sells stocks and other investments for a financial market participant in return for a commission, markup, or fee. In most countries they are regulated as a broker or broker-dealer and ...

s executing trades for retail investors at a conference hosted by Piper Sandler Companies. On May 12, FTX CEO Sam Bankman-Fried disclosed a Schedule 13D filing with the SEC to buy a 7.6 percent ownership stake in Robinhood Markets. On June 27, FTX CEO Sam Bankman-Fried stated that no

discussions were being held with Robinhood Markets about an acquisition (despite reports of internal discussion to do so and reports of the company approaching at least three stock trading start-ups about acquisitions). On July 20, the

Social Science Research Network The Social Science Research Network (SSRN) is an open access research platform that functions as a repository for sharing early-stage research and the rapid dissemination of scholarly research in the social sciences, humanities, life sciences, ...

released a

preprint In academic publishing, a preprint is a version of a scholarly or scientific paper that precedes formal peer review and publication in a peer-reviewed scholarly or scientific journal. The preprint may be available, often as a non-typeset versi ...

written by economists

Maureen O'Hara Maureen O'Hara (; 17 August 1920 – 24 October 2015) was an Irish-born naturalized American actress who became successful in Hollywood from the 1940s through to the 1960s. She was a natural redhead who was known for playing passionate b ...

, Robert P. Bartlett, and Justin McCrary that suggested that Robinhood Markets traders caused a surge in trading volume of

Berkshire Hathaway Berkshire Hathaway Inc. () is an American multinational conglomerate holding company headquartered in Omaha, Nebraska. Originally a textile manufacturer, the company transitioned into a conglomerate starting in 1965 under the management of c ...

Class A share In finance, a class A share refers to a share classification of common or preferred stock that typically has enhanced benefits with respect to dividends, asset sales, or voting rights compared to Class B or Class C shares. There may be restri ...

s in February and March 2021.

Greenwashing, ESG, and carbon neutrality

On January 28, 2021,

Microsoft Microsoft Corporation is an American multinational corporation and technology company, technology conglomerate headquartered in Redmond, Washington. Founded in 1975, the company became influential in the History of personal computers#The ear ...

disclosed an investment in Climeworks, a direct air capture company, one year after the company announced a strategy to take the company carbon negative by 2030 and to remove all the carbon from the environment the company has emitted since 1975 by 2050. In 2021 and 2022, an index constructed by researchers at the

University of Cambridge The University of Cambridge is a Public university, public collegiate university, collegiate research university in Cambridge, England. Founded in 1209, the University of Cambridge is the List of oldest universities in continuous operation, wo ...

showed that

bitcoin mining The bitcoin protocol is the set of rules that govern the functioning of bitcoin. Its key components and principles are: a peer-to-peer decentralized network with no central oversight; the blockchain technology, a public ledger that records all ...

consumed more electricity during the course of the year than the entire nations of

Argentina Argentina, officially the Argentine Republic, is a country in the southern half of South America. It covers an area of , making it the List of South American countries by area, second-largest country in South America after Brazil, the fourt ...

(a G20 country) and the

Netherlands , Terminology of the Low Countries, informally Holland, is a country in Northwestern Europe, with Caribbean Netherlands, overseas territories in the Caribbean. It is the largest of the four constituent countries of the Kingdom of the Nether ...

. On February 8, 2021,

Tesla, Inc. Tesla, Inc. ( or ) is an American multinational automotive and clean energy company. Headquartered in Austin, Texas, it designs, manufactures and sells battery electric vehicles (BEVs), stationary battery energy storage devices from h ...

disclosed to the SEC that it purchased $1.5 billion worth of

. On April 15,

Apple Inc. Apple Inc. is an American multinational corporation and technology company headquartered in Cupertino, California, in Silicon Valley. It is best known for its consumer electronics, software, and services. Founded in 1976 as Apple Comput ...

announced the creation of $200 million

forestry Forestry is the science and craft of creating, managing, planting, using, conserving and repairing forests and woodlands for associated resources for human and Natural environment, environmental benefits. Forestry is practiced in plantations and ...

fund as part of the company's strategy to become

carbon neutral Global net-zero emissions is reached when greenhouse gas emissions and Greenhouse gas removal, removals due to human activities are in balance. It is often called simply net zero. ''Emissions'' can refer to all greenhouse gases or only carbon diox ...

by 2030. On February 7, 2022, the NewClimate Institute, a German environmental policy think tank, published a survey evaluating the transparency and progress of the climate strategies and pledges announced by 25 major companies in the United States that found that the climate pledges of Alphabet, Amazon, and Apple were unsubstantiated and misleading. On June 23, 2020, Amazon.com, Inc. announced a $2 billion venture fund to invest in startup companies developing strategies to reduce

greenhouse gas emissions Greenhouse gas (GHG) emissions from human activities intensify the greenhouse effect. This contributes to climate change. Carbon dioxide (), from burning fossil fuels such as coal, petroleum, oil, and natural gas, is the main cause of climate chan ...

as part of a strategy to be climate neutral company by 2040, after announcing a $10 million investment to two projects in the

Appalachian Mountains The Appalachian Mountains, often called the Appalachians, are a mountain range in eastern to northeastern North America. The term "Appalachian" refers to several different regions associated with the mountain range, and its surrounding terrain ...

the previous April to manage their lands to maximize greater carbon removal, the first investment from a $100 million initiative to support

reforestation Reforestation is the practice of restoring previously existing forests and woodlands that have been destroyed or damaged. The prior forest destruction might have happened through deforestation, clearcutting or wildfires. Three important purpose ...

and

habitat restoration Ecological restoration, or ecosystem restoration, is the process of assisting the recovery of an ecosystem that has been degraded, damaged, destroyed or transformed. It is distinct from conservation in that it attempts to retroactively repair ...

. On June 30, 2021, Amazon released its annual company annual sustainability report that showed that company net carbon emissions grew by 19 percent from 2019 to 2020. On February 11, 2022, Western Louisiana U.S. District Court Judge James D. Cain Jr. issued a preliminary

injunction An injunction is an equitable remedy in the form of a special court order compelling a party to do or refrain from doing certain acts. It was developed by the English courts of equity but its origins go back to Roman law and the equitable rem ...

in ''Louisiana v. Biden'' (2022) in favor of the plaintiffs to block federal agency requirements to assess the societal costs of greenhouse gas emissions in regulatory actions under Executive Order 13990. On March 16, the U.S. 5th Circuit Court of Appeals stayed the decision following an appeal by the

U.S. Justice Department The United States Department of Justice (DOJ), also known as the Justice Department, is a United States federal executive departments, federal executive department of the U.S. government that oversees the domestic enforcement of Law of the Unite ...

, and on May 26, the

U.S. Supreme Court The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that turn on question ...

issued an order without comment or opposition dismissing an appeal filed by the plaintiffs to reverse the 5th Circuit Court of Appeals decision. On February 15,

ConocoPhillips ConocoPhillips Company is an American multinational corporation engaged in hydrocarbon exploration and production. It is based in the Energy Corridor district of Houston, Texas. The company has operations in 15 countries and has production in t ...

announced a pilot program to sell its flare gas to a company operating a bitcoin mine in the Bakken Formation region of

North Dakota North Dakota ( ) is a U.S. state in the Upper Midwest, named after the indigenous Dakota people, Dakota and Sioux peoples. It is bordered by the Canadian provinces of Saskatchewan and Manitoba to the north and by the U.S. states of Minneso ...

as part of an industry initiative to reduce routine flaring to zero by 2030. On March 21, the SEC approved rules requiring the disclosure of stock corporation climate risks and net contribution to greenhouse gas emissions in 10-K forms. On the same day, ''The Wall Street Journal'' criticized Gensler for proposing legislation requiring public companies to disclose climate risks. "The proposal ... is contrary to SEC history, securities law, and sound regulatory practice", the paper wrote. It accused the SEC chairman of trying "to regulate private companies by the back door" and following the bidding of

BlackRock BlackRock, Inc. is an American Multinational corporation, multinational investment company. Founded in 1988, initially as an enterprise risk management and fixed income institutional asset manager, BlackRock is the world's largest asset manager ...

and other investors. On March 26, CNBC reported that

ExxonMobil Exxon Mobil Corporation ( ) is an American multinational List of oil exploration and production companies, oil and gas corporation headquartered in Spring, Texas, a suburb of Houston. Founded as the Successors of Standard Oil, largest direct s ...

started a pilot program in January 2021 with Crusoe Energy Systems to also divert its flare gas into generators producing electricity to power shipping containers full of bitcoin miners in the North Dakota Bakken region (which it expanded the following July) as part of the same industry initiative with ConocoPhillips, and that Crusoe has stated reduces

carbon dioxide equivalent Global warming potential (GWP) is a measure of how much heat a greenhouse gas traps in the atmosphere over a specific time period, relative to carbon dioxide (). It is expressed as a multiple of warming caused by the same mass of carbon dioxide ( ...

emissions by 63 percent as compared with continued flaring. On April 12,

Alphabet Inc. Alphabet Inc. is an American multinational technology conglomerate holding company headquartered in Mountain View, California. Alphabet is the world's third-largest technology company by revenue, after Amazon and Apple, the largest techno ...

Meta Platforms Meta Platforms, Inc. is an American multinational technology company headquartered in Menlo Park, California. Meta owns and operates several prominent social media platforms and communication services, including Facebook, Instagram, Threads ...

Shopify Shopify Inc., stylized as ''shopify'', headquartered in Ottawa, Ontario, operates an e-commerce platform for retail point-of-sale systems that offers payments, marketing, shipping, inventory management, transaction management, and customer eng ...

McKinsey & Company McKinsey & Company (informally McKinsey or McK) is an American multinational strategy and management consulting firm that offers professional services to corporations, governments, and other organizations. Founded in 1926 by James O. McKinse ...

, and Stripe, Inc. announced a $925 million

advance market commitment An advance market commitment (AMC) is a promise to buy or subsidise a product if it is successfully developed. AMCs are typically offered by governments or private foundations to encourage the development of vaccines or Medical treatment, treatmen ...

of permanent carbon removal from companies that are developing the technology over the next 9 years. On May 19, after Tesla was removed from the

S&P 500 The Standard and Poor's 500, or simply the S&P 500, is a stock market index tracking the stock performance of 500 leading companies listed on stock exchanges in the United States. It is one of the most commonly followed equity indices and in ...

ESG

Index Index (: indexes or indices) may refer to: Arts, entertainment, and media Fictional entities * Index (''A Certain Magical Index''), a character in the light novel series ''A Certain Magical Index'' * The Index, an item on the Halo Array in the ...

S&P Dow Jones Indices S&P Dow Jones Indices LLC is a joint venture between S&P Global and the CME Group, that was announced in 2011 and later launched in 2012. It produces, maintains, licenses, and markets stock market indices as benchmarks and as the basis of in ...

, Tesla CEO

Elon Musk Elon Reeve Musk ( ; born June 28, 1971) is a businessman. He is known for his leadership of Tesla, SpaceX, X (formerly Twitter), and the Department of Government Efficiency (DOGE). Musk has been considered the wealthiest person in th ...

posted a tweet to his

Twitter Twitter, officially known as X since 2023, is an American microblogging and social networking service. It is one of the world's largest social media platforms and one of the most-visited websites. Users can share short text messages, image ...

account criticizing the decision and, in noting that ExxonMobil was rated within the top 10 constituent companies in the index by

weight In science and engineering, the weight of an object is a quantity associated with the gravitational force exerted on the object by other objects in its environment, although there is some variation and debate as to the exact definition. Some sta ...

, accused ESG of being a scam. On May 25, the SEC proposed two rules changes to ESG

investment fund An investment fund is a way of investment, investing money alongside other investors in order to benefit from the inherent advantages of working as part of a group such as reducing the risks of the investment by a significant percentage. These ad ...

qualifications to prevent

greenwashing Greenwashing (a compound word modeled on "whitewash"), also called green sheen, is a form of advertising or marketing spin that deceptively uses green PR and green marketing to persuade the public that an organization's products, goals, or ...

marketing practices and to increase disclosure requirements for achieving ESG impacts. On June 10, the SEC was reportedly investigating the ESG investment funds of Goldman Sachs for potential greenwashing. After noting that his company had launched a division to commercialize carbon capture in testimony before the U.S. House Oversight and Reform Committee on October 28, 2021, ExxonMobil CEO

Darren Woods Darren Wayne Woods (born December 16, 1965) is an American businessman who is the chief executive officer (CEO) and chairman of ExxonMobil since January 1, 2017. Early life and education Woods was born in Wichita, Kansas. Due to his father's wo ...

discussed in an interview with

CNBC CNBC is an American List of business news channels, business news channel owned by the NBCUniversal News Group, a unit of Comcast's NBCUniversal. The network broadcasts live business news and analysis programming during the morning, Day ...

journalist David Faber on June 24 that part of ExxonMobil's long-term strategy to remain a profitable company while reducing greenhouse gas emissions and

plastic pollution Plastic pollution is the accumulation of plastic objects and particles (e.g. plastic bottles, bags and microbeads) in the Earth's environment that adversely affects humans, wildlife and their habitat. Plastics that act as pollutants are catego ...

was to invest in carbon capture and storage technology with a network hub in

Houston Houston ( ) is the List of cities in Texas by population, most populous city in the U.S. state of Texas and in the Southern United States. Located in Southeast Texas near Galveston Bay and the Gulf of Mexico, it is the county seat, seat of ...

and to remain a plastics producer while making improvements to

waste management Waste management or waste disposal includes the processes and actions required to manage waste from its inception to its final disposal. This includes the collection, transport, treatment, and disposal of waste, together with monitor ...

. On June 30, the Supreme Court ruled in '' West Virginia v. EPA'' (2022) that the U.S. Environmental Protection Agency did not have the authority under the Clean Air Act to devise a broad cap-and-trade system for carbon emissions by power plants that the agency attempted to promulgate under the

Clean Power Plan The Clean Power Plan was an Presidency of Barack Obama, Obama administration policy aimed at combating climate change that was first proposed by the United States Environmental Protection Agency, Environmental Protection Agency (EPA) in June 201 ...

and instead that the authority to do so rests with the

U.S. Congress The United States Congress is the legislative branch of the federal government of the United States. It is a bicameral legislature, including a lower body, the U.S. House of Representatives, and an upper body, the U.S. Senate. They both ...

Social media

On March 2, 2021, Rocket Mortgage saw a more than 70 percent spike in its stock price during the

due to a surge in trading following discussion of the company on

r/wallstreetbets r/wallstreetbets, also known as WallStreetBets or WSB, is a subreddit where participants discuss stock and option trading. It has become notable for its colorful jargon, aggressive trading strategies, stories of extreme gains and losses acquire ...

, but the Rocket Mortgage stock price reverted to its pre-surge level the next day. On September 14, Gensler announced the imminent release of an agency report on the short squeeze in testimony before the U.S. Senate Banking, Housing, and Urban Affairs Committee. On October 18, the SEC released the report. Also in October 2021, eight

whistleblower Whistleblowing (also whistle-blowing or whistle blowing) is the activity of a person, often an employee, revealing information about activity within a private or public organization that is deemed illegal, immoral, illicit, unsafe, unethical or ...

complaints alleging

securities fraud Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information.Facebook, Inc. were filed anonymously with the SEC by

Whistleblower Aid Whistleblower Aid is a nonprofit legal assistance organization co-founded by John Tye (whistleblower), John Tye and Mark Zaid to help whistleblowers in government and the private sector. It provides free legal services as well as support and securi ...

on behalf of former company employee Frances Haugen after Haugen leaked thousands of company documents to ''

The Wall Street Journal ''The Wall Street Journal'' (''WSJ''), also referred to simply as the ''Journal,'' is an American newspaper based in New York City. The newspaper provides extensive coverage of news, especially business and finance. It operates on a subscriptio ...

'' the previous month. After publicly revealing her identity on ''

60 Minutes ''60 Minutes'' is an American television news magazine broadcast on the CBS television network. Debuting in 1968, the program was created by Don Hewitt and Bill Leonard, who distinguished it from other news programs by using a unique style o ...

'', Haugen testified before the U.S. Senate Commerce Subcommittee on Consumer Protection, Product Safety, and Data Security about the content of the leaked documents and the complaints. After the company renamed itself as Meta Platforms, Whistleblower Aid filed two additional securities fraud complaints with the SEC against the company on behalf of Haugen in February 2022. On November 18, 2021, U.S. Senator

Elizabeth Warren Elizabeth Ann Warren (née Herring; born June 22, 1949) is an American politician and former law professor who is the Seniority in the United States Senate, senior United States senator from the state of Massachusetts, serving since 2013. A mem ...

(D– MA) sent a letter to Gensler requesting that the SEC investigate possible securities law violations in the conduct of a merger between the Digital World Acquisition Corp. (DWAC), a

special-purpose acquisition company A special-purpose acquisition company (SPAC; ), also known as a blank check company or a blind-pool stock offering, is a shell corporation listed on a stock exchange with the purpose of acquiring (or merging with) a private company, thus taking ...

, and the Trump Media & Technology Group (TMTG) announced on October 20. On December 6, an ongoing SEC investigation into the DWAC–TMTG merger was disclosed by DWAC in a filing with the agency. On February 18, 2022, the U.S. 11th Circuit Court of Appeals ruled in a lawsuit against

Bitconnect Bitconnect (stylized ''bitconnect'' and also spelled BitConnect, Ticker symbol, ticker code BCC) was an open-source cryptocurrency in 2016–2018 that was connected with a high-yield investment program, a type of Ponzi scheme. After the platform ...

that the

Securities Act of 1933 The Securities Act of 1933, also known as the 1933 Act, the Securities Act, the Truth in Securities Act, the Federal Securities Act, and the '33 Act, was enacted by the United States Congress on May 27, 1933, during the Great Depression and afte ...

extends to targeted solicitation using

social media Social media are interactive technologies that facilitate the Content creation, creation, information exchange, sharing and news aggregator, aggregation of Content (media), content (such as ideas, interests, and other forms of expression) amongs ...

. In a securities filing dated June 8 and disclosed to the Florida State Department Corporations Division, DWAC stated that

Donald Trump Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who is the 47th president of the United States. A member of the Republican Party (United States), Republican Party, he served as the 45 ...

and Donald Trump Jr. had been removed from the company board of directors. On June 14, DWAC disclosed that the SEC issued a subpoena for additional company documents and information about the merger. On June 27, DWAC disclosed that the SEC issued an additional subpoena as well as an investigation by the

. On July 19, Amazon. filed a lawsuit against more than 10,000

Facebook group Facebook Platform, Facebook is a Social network, social-network service website launched on February 4, 2004, by Mark Zuckerberg. The following is a list of software and technology features that can be found on the Facebook website and mobile ...

administrators for distributing fake

user review A user review is a review conducted by any person who has access to the internet and publishes their experience to a review site or social media platform following product testing or the evaluation of a service. User reviews are commonly provided ...

s of Amazon products in violation of Facebook company policies.

Tesla and Twitter

On November 6, 2021,

CEO A chief executive officer (CEO), also known as a chief executive or managing director, is the top-ranking corporate officer charged with the management of an organization, usually a company or a nonprofit organization. CEOs find roles in variou ...

posted a tweet on his

account that conducted a poll of his followers over whether he should sell 10% of his Tesla stock. On December 3, Musk had sold approximately $10 billion worth of his Tesla shares. On December 6, the SEC opened an investigation of Tesla in response to a whistleblower complaint alleging the company did not properly disclose to its shareholders fire risks associated with its

solar panel A solar panel is a device that converts sunlight into electricity by using photovoltaic (PV) cells. PV cells are made of materials that produce excited electrons when exposed to light. These electrons flow through a circuit and produce direct ...

s. On February 7, 2022, Tesla disclosed in a filing to the SEC that the agency had issued a

subpoena A subpoena (; also subpœna, supenna or subpena) or witness summons is a writ issued by a government agency, most often a court, to compel testimony by a witness or production of evidence under a penalty for failure. There are two common types of ...

to the company for information about company governance policies to comply with an October 2018 settlement with the agency in a securities fraud lawsuit over a tweet Musk posted on his Twitter account about taking Tesla

private Private or privates may refer to: Music * "In Private", by Dusty Springfield from the 1990 album ''Reputation'' * Private (band), a Denmark-based band * "Private" (Ryōko Hirosue song), from the 1999 album ''Private'', written and also recorded ...

in August 2018 that the agency subsequently requested that Musk be held in

contempt of court Contempt of court, often referred to simply as "contempt", is the crime of being disobedient to or disrespectful toward a court of law and its officers in the form of behavior that opposes or defies the authority, justice, and dignity of the co ...

for violating in February 2019 (that resulted in an amended settlement the following April), and that the agency sent letters to the company in 2019 and in 2020 warning the company that tweets Musk posted in July 2019 and in May 2020 were in violation of. On February 17, Musk's attorneys filed a letter with the presiding judge in the 2018 settlement alleging that the SEC was attempting to

chill In computing, CHILL (an acronym for CCITT High Level Language) is a procedural programming language designed for use in telecommunication switches (the hardware used inside telephone exchanges). The language is still used for legacy systems ...

his

First Amendment First most commonly refers to: * First, the ordinal form of the number 1 First or 1st may also refer to: Acronyms * Faint Images of the Radio Sky at Twenty-Centimeters, an astronomical survey carried out by the Very Large Array * Far Infrared a ...

right to

freedom of speech Freedom of speech is a principle that supports the freedom of an individual or a community to articulate their opinions and ideas without fear of retaliation, censorship, or legal sanction. The rights, right to freedom of expression has been r ...

and that the SEC had failed to pay Tesla shareholders the $40 million in fines the agency had assessed from him and the company under the terms of the settlement, which the SEC disputed in a letter filed with the court in response on February 18. On February 21, Musk's attorneys filed a second letter with the court alleging the SEC had illegally leaked information from an investigation into him. On February 24, Southern New York U.S. District Court Judge Alison Nathan issued an order rejecting requests made by Musk in his February 21 letter, while the SEC was in the process of conducting an

insider trading Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider informati ...

investigation of Musk and his brother Kimbal Musk for a $108 million sale of Tesla stock before Elon's November 2021 tweet. On March 8, Musk filed a motion with the court to have the 2018 settlement with the SEC terminated. On March 22, the SEC filed a response to Musk's March 8 filing requesting that Judge Nathan deny Musk's motion, that its subpoenas were lawful, and disclosed that the agency was investigating Musk for his November 2021 tweet. On March 29, Musk filed another letter with the court reiterating his First Amendment concerns. On April 4, Musk submitted a 13G filing with the SEC to purchase a 9.2% passive ownership stake in

Twitter, Inc. Twitter, Inc. was an American social media company based in San Francisco, California, which operated and was named for its flagship social media network prior to its rebrand as X. In addition to Twitter, the company previously operated the V ...

, but then submitted a

Schedule 13D Schedule 13D is an SEC filing that must be submitted to the US Securities and Exchange Commission within 10 days by anyone who acquires beneficial ownership of more than 5% of any class of publicly traded securities in a public company. A filer mu ...

beneficial ownership In domestic and international commercial law, a beneficial owner is a natural person or persons who ultimately owns or controls an interest in a legal entity or arrangement, such as a company, a trust, or a foundation. Legal owners (i.e. the own ...

filing reserving the right to purchase a larger stake in the company with the agency the next day (and because the disclosure was filed later than an SEC deadline, it may have made Musk an additional $156 million). On April 13, a group of Twitter shareholders filed a lawsuit against Musk for failing to disclose his ownership stake to the SEC within the agency's prescribed deadline. On April 14, Musk filed an offer to buy Twitter, Inc. with the SEC for $43 billion and take the company private (which was revised a week later to $46.5 billion). On April 15, Northern California U.S. District Court Judge Edward M. Chen ruled in a lawsuit filed by Tesla shareholders against Musk and the company that his August 2018 tweet was a knowingly made false statement of fact (the day after Musk stated at the 2022 TED conference that it was not). On April 22, Republican Conference members of the U.S. House Judiciary Committee wrote a letter to the Twitter board of directors requesting that company executives preserve all company records related to Musk's acquisition proposal. On April 25, the Twitter board of directors unanimously agreed to Musk's acquisition proposal at $44 billion. On April 27, Southern New York U.S. District Court Judge Lewis J. Liman denied Musk's motion to terminate the 2018 settlement. On April 30, Musk filed an

amicus brief An amicus curiae (; ) is an individual or organization that is not a party to a legal case, but that is permitted to assist a court by offering information, expertise, or insight that has a bearing on the issues in the case. Whether an ''amic ...

along with

Dallas Mavericks The Dallas Mavericks (often referred to as the Mavs) are an American professional basketball team based in Dallas. The Mavericks compete in the National Basketball Association (NBA) as a member of the Southwest Division (NBA), Southwest Divisi ...

team owner

Mark Cuban Mark Cuban (born July 31, 1958) is an American businessman and television personality. He is the former principal owner and current minority owner of the Dallas Mavericks of the National Basketball Association (NBA) and co-owner of 2929 Entertain ...

in support of a petition to the

by a former

chief financial officer A chief financial officer (CFO) is an officer of a company or organization who is assigned the primary responsibility for making decisions for the company for projects and its finances; i.a.: financial planning, management of financial risks, ...

Xerox Xerox Holdings Corporation (, ) is an American corporation that sells print and electronic document, digital document products and services in more than 160 countries. Xerox was the pioneer of the photocopier market, beginning with the introduc ...

to review a 2003 settlement the Xerox CFO made with the SEC that includes a

gag order A gag order (also known as a gagging order or suppression order) is an order, typically a legal order by a court or government, restricting information or comment from being made public or passed on to any unauthorized third party. The phrase may ...

that the plaintiff argues is in violation of his First Amendment right to freedom of speech. On May 13, Musk posted a tweet that his acquisition of Twitter would be put on hold until statistics about spambots and fake accounts on

were verified, while the SEC and the

Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) United States antitrust law, antitrust law and the promotion of consumer protection. It ...

began investigations of Musk for violating filing deadlines for his Twitter passive ownership stake and his subsequent company acquisition proposal respectively. On May 16, Twitter CEO Parag Agrawal posted a tweet detailing company policies for addressing fake and spam accounts in response to Musk (to which Musk posted a tweet in return). On May 17, Musk tweeted that the Twitter acquisition would not move forward until he had greater clarification about the ratio of fake and spam accounts on the site, later tweeting a poll of his followers' opinions of Twitter, Inc. statements about the ratio of fake and spam accounts in filings to the SEC (and where Musk posted a comment in the poll thread calling upon the SEC to investigate whether the company's statements disclosing the ratio in filings to the agency are true). On the same day, Twitter submitted a new filing with the SEC that stated that Musk had met with Twitter executives for three days before he announced his acquisition proposal. On May 24,

Reuters Reuters ( ) is a news agency owned by Thomson Reuters. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide writing in 16 languages. Reuters is one of the largest news agencies in the world. The agency ...

reported that since the April 2019 amended settlement between Musk and the SEC, agency officials have consciously chosen not to pursue legal action against Musk for violating the terms of the agreement and to write letters urging compliance instead due to remarks made by the presiding judge during the case. On May 25, Twitter shareholders filed a

class action A class action is a form of lawsuit. Class Action may also refer to: * ''Class Action'' (film), 1991, starring Gene Hackman and Mary Elizabeth Mastrantonio * Class Action (band), a garage house band * "Class Action" (''Teenage Robot''), a 2002 e ...

lawsuit against Musk and Twitter, Inc. alleging market manipulation and violation of California corporate laws. On June 3, a dozen political advocacy groups (including the Center for Countering Digital Hate,

GLAAD GLAAD () is an American non-governmental media monitoring organization. Originally founded as a protest against defamatory coverage of gay and lesbian demographics and their portrayals in the media and entertainment industries, it has since ...

, and MediaJustice) announced a campaign to block Musk's Twitter acquisition proposal by pressuring government agencies to review the acquisition, persuading Tesla shareholders to take legal action against the proposal, and asking advertisers to boycott the platform. On June 6, Musk's attorneys disclosed a letter to the SEC accusing Twitter executives of a material breach of contract due to lack of information provided about fake and spam accounts and claimed to reserve Musk's right to terminate the merger agreement (despite Musk waiving

due diligence Due diligence is the investigation or exercise of care that a reasonable business or person is normally expected to take before entering into an agreement or contract with another party or an act with a certain standard of care. Due diligence ...

in his offer to buy the company on April 14). On July 1, an

investment management Investment management (sometimes referred to more generally as financial asset management) is the professional asset management of various Security (finance), securities, including shareholdings, Bond (finance), bonds, and other assets, such as r ...

group affiliated with the

pension fund A pension fund, also known as a superannuation fund in some countries, is any program, fund, or scheme which provides pension, retirement income. The U.S. Government's Social Security Trust Fund, which oversees $2.57 trillion in assets, is the ...

s of Strategic Organizing Center labor unions wrote a letter to the SEC requesting that the agency investigate Tesla for violating the terms of the October 2018 settlement with the agency after the company disclosed in its annual

proxy statement A proxy statement is a statement provided by a firm soliciting shareholder votes. The statement includes voting procedure and information, background information about the company's nominated directors, board compensation, executive compensation ...

(filed with the SEC the previous month) that

Oracle Corporation Oracle Corporation is an American Multinational corporation, multinational computer technology company headquartered in Austin, Texas. Co-founded in 1977 in Santa Clara, California, by Larry Ellison, who remains executive chairman, Oracle was ...

CEO Larry Ellison did not intend to stand for re-election as company chairman and that the company did not intend to replace his seat on the board (thereby reducing its size). On July 8, Musk filed a letter with the SEC sent to Twitter executives notifying them that he intended to terminate his acquisition proposal of the company, to which Twitter Board Chairman Bret Taylor posted a tweet stating that the company would continue to attempt to close the transaction and that it would pursue legal action to enforce the merger. On July 12, Twitter Inc. filed a lawsuit against Musk in the

Delaware Court of Chancery The Delaware Court of Chancery is a court of equity in the U.S. state of Delaware. It is one of Delaware's three constitutional courts, along with the Supreme Court and Superior Court. Since 2018, the court consists of seven judges. The cour ...

to enforce the acquisition agreement. On July 14, the SEC disclosed a letter sent to Musk on June 2 for additional information about his 13D filing on April 5. On July 15, Musk filed a motion requesting that the court not grant Twitter's request for a speedy trial, while Twitter submitted an amended proxy statement with the SEC that urged company shareholders to approve the acquisition agreement. On July 18, Twitter submitted a filing with the court stating that Musk's request to deny a speedy trial was a tactical delay, that Musk's tactics were harming Twitter's reputation and share price, and urged the court to schedule the earliest possible trial date. On July 19, the court ruled in Twitter's favor and scheduled a five-day trial to take place the following October. On July 22, Twitter released its earnings report for the second quarter of 2022 that showed a 1 percent decline in year-over-year company revenue and that company earnings were lower than analysts' expectations (which the company partially attributed to uncertainty created by the acquisition agreement). On July 25, Tesla disclosed in a filing with the SEC that the company had received a second subpoena from the agency on June 13 with respect to the 2018 settlement. On July 26, Twitter disclosed in filing with the SEC that the company had scheduled a shareholder meeting on September 13, 2022, to vote on the acquisition agreement. In a complaint filed by Whistleblower Aid with the SEC, the U.S. Justice Department, and the Federal Trade Commission on July 6, former Twitter security officer Peiter Zatko alleged that specific Twitter executives—including Parag Agrawal and certain board members—have repeatedly made false and misleading statements to its board, shareholders, users, regulators, and the public about privacy, security, and content moderation on the platform since 2011 in violation of the Federal Trade Commission Act of 1914 and SEC disclosure rules including misrepresentations to Musk during the course of the acquisition bid (citing Agrawal's May 16 tweet detailing company policies for addressing fake and spam accounts).

Author

Outside of Gensler's business and public service career, Gensler has co-authored a book with Greg Baer, a fellow Clinton Administration alum, ''The Great Mutual Fund Trap''. The book uses empirical data to show that the average mutual fund consistently underperforms the market. The book argues that actively-traded mutual funds carry high fees and lower-than-market returns, and investors should instead rely on low-fee index funds rather than constantly attempt to beat the market.

Political involvement

Gensler served as treasurer of the Maryland Democratic Party for two years, and held several senior roles on the Maryland campaigns of U.S. Senator Barbara Mikulski, former Lieutenant Governor Kathleen Kennedy Townsend, and Governor Martin O'Malley. During the 2008 presidential campaign cycle, Gensler served as a senior advisor to Hillary Clinton's presidential campaign and later advised the Obama campaign. In May 2015, Gensler was named chief financial officer of Clinton's campaign for president.

Academic

Gensler is Professor of the Practice of Global Economics and Management,

, co-director of MIT's Fintech@CSAIL and senior adviser to the MIT Media Lab Digital Currency Initiative. He focuses on the intersection of finance and technology, conducts research and teaches on blockchain technology, digital currencies, financial technology and public policy. He is a member of the New York Fed Fintech Advisory Group, a group of experts in financial technology that regularly presents views and perspectives on the topic to the president of the New York Fed. Gensler won the MIT Sloan Outstanding Teacher Award based upon student nominations for the 2018–19 academic year.

Personal life

Gensler lives in Baltimore with his three daughters, Anna, Lee and Isabel. Gensler was married to filmmaker and photo collagist Francesca Danieli from 1986 until her death from breast cancer in 2006. Gensler is a runner and has finished nine marathons and one 50-mile ultramarathon. He also is a mountain climber, having summited Mount Rainier and Mount Kilimanjaro.

References

; Bundled references

External links

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CFTC biography
, - , - , - {{DEFAULTSORT:Gensler, Gary 1957 births 20th-century American Jews American corporate directors Businesspeople from Baltimore Clinton administration personnel Commodity Futures Trading Commission personnel Employees of the United States Senate Goldman Sachs people Heads of United States federal agencies Living people Maryland Democrats Obama administration personnel United States Department of the Treasury officials 2004 United States presidential electors People associated with cryptocurrency Massachusetts Institute of Technology faculty MIT Sloan School of Management faculty Members of the U.S. Securities and Exchange Commission Biden administration personnel Political campaign staff 21st-century American Jews