January 29, 2025
With some federal appointees publicly tasked with overhauling or even eliminating the departments they’re tapped to lead, President Trump’s choice of Securities and Exchange Commission veteran and Washington insider Paul S. Atkins to head the agency seems to harken to a more conventional time.
Mr. Atkins is an unarguably experienced pick with a history of service to the agency, acting as an SEC Commissioner under Presidents George W. Bush and Obama and a high-level staffer for SEC Chairs Arthur Levitt and Richard Breeden before that. That makes him likely to be a more evolutionary Chair than a revolutionary one, according to Cohen Milstein partner Daniel S. Sommers.
“In contrast to some of the President-elect’s nominees for other agencies, I think it unlikely that Mr. Atkins will have the dismantling of the SEC as his mission,” Mr. Sommers said. “So, to the extent that U.S. politics is cyclical, there may still be a sufficient infrastructure at the SEC to resume pro-investor activity when Democratic control returns to the White House.”
As an SEC Commissioner from 2002 to 2008, Mr. Atkins largely followed the standard recent playbook for Republican appointees—backing measures to expand access to capital markets over increased regulation and expressing doubts about the value of holding public companies responsible when their executives break the law.
Mr. Sommers said Mr. Atkins’ tenure as an SEC Commissioner provides strong evidence as to how he will approach the SEC’s enforcement function if confirmed by the Senate. “We should expect that Mr. Atkins will strongly favor enforcement actions against individuals rather than corporations, and will look at all potential enforcement actions with heightened skepticism,” he said.
“While those approaches may not be ideal for institutional investors, I take at least some limited comfort from his history of working at the SEC and what appears to be his appreciation of the SEC’s importance as an institution,” Mr. Sommers said.
After leaving the SEC, Mr. Atkins founded DC-based political consulting firm Patomak Global Partners, advising financial industry and cryptocurrency clients about markets and regulatory issues. In 2016, he was a member of President Trump’s first-term transition team, advising the incoming administration on financial policies and appointments.
Since returning to the private sector, Mr. Atkins has expressed views in line with policies currently popular among Republican lawmakers and diametrically opposed to positions favored by his predecessor, Gary Gensler, who resigned on January 20. Under former Chair Gensler, the SEC filed lawsuits against large crypto-related companies, including digital exchanges Coinbase and Kraken, and enacted rules requiring climate-risk disclosures in public company filings.
Mr. Atkins, meanwhile, is an outspoken advocate for facilitating the growth of cryptocurrencies, sitting on the board of advisors of the Digital Chamber of Commerce, a blockchain trade association. Last year, he criticized “activist” investing, denouncing in a Newsweek article Department of Labor rules changes that he said “would encourage” asset managers to include environmental, social, and governance considerations in their investment decisions.
President Trump, who as recently as 2021 said cryptocurrencies looked like a “disaster waiting to happen” and that bitcoin “just seems like a scam,” did an about-face on digital currencies during this year’s election campaign. In a Truth Social post announcing his pick, President Trump said Mr. Atkins “recognizes that digital assets & other innovations are crucial to Making America Greater than Ever Before.”
In his post, President Trump also called Mr. Atkins “a proven leader for common sense regulations” who “believes in the promise of robust, innovative capital markets that are responsive to the needs of Investors, & that provide capital to make our Economy the best in the World.”
Whatever agenda he sets as Chair, Mr. Atkins will almost certainly face some daunting challenges to retain experienced staff if the new administration makes good on its public promises to “drain the swamp” by greatly reducing the size of the federal workforce.
In his first days in office, President Trump signed an executive order reclassifying federal employees involved in policy to make those employees easier to fire. The president of the American Federation of Government Employees, Everett Kelly, said the new order could eliminate civil service protections for “hundreds of thousands of federal jobs,” making those employees “answerable to the will of one man.”
In addition, President Trump issued an executive order creating a new Department of Government Efficiency (DOGE) within the Executive Office. In an opinion article published by The Wall Street Journal following the election, DOGE Chair Elon Musk wrote that the projected “drastic reduction in federal regulations” would justify “mass head-count reductions” across the federal government. These reductions, he wrote, could be achieved through “large-scale firings” and “voluntary terminations” induced by measures such as relocating federal employees outside Washington and ending remote work.
As if to underscore the changing of the guard, the SEC issued a flurry of enforcement actions in the waning days of the Biden administration, including one against Mr. Musk. The SEC suit accused Mr. Musk of violating federal securities laws by failing to timely disclose his acquisition of more than 5% of Twitter’s outstanding shares prior to his 2022 acquisition of the social media platform, now named X. The maneuver allowed Mr. Musk to underpay for his purchase by at least $150 million, the SEC alleged. It’s unclear if the SEC will continue to pursue the lawsuit under Chair Atkins.