Analysis-Trump's SEC pick Atkins marks victory for establishment expertise

By Chris Prentice and Douglas Gillison

While Wall Street breathed a sigh of relief at President-elect Donald Trump's pick of respected Washington lawyer Paul Atkins to lead the Securities and Exchange Commission, critics worry his light-touch philosophy and crypto-friendly stance will hurt investors.

After a string of controversial cabinet picks considered by critics to be lacking in qualifications, financial executives had wondered whether populist Trump loyalists were headed for the financial agencies too. But the choice of Atkins, a former top SEC official and well-liked veteran of financial and Republican circles, marked a victory for establishment expertise, said industry executives.

Several people who have worked with Atkins also described him as highly professional, principled and fun.

"Paul is a quality pick who will have credibility on both sides of the aisle," said Stephen Crimmins, who worked as an enforcement attorney at the SEC for 14 years, overlapping with Atkins for some of that time. "He knows securities regulation cold and has the people skills to get things done."

Atkins, 66, is familiar with both the complex plumbing of the markets and the inner workings of the 5,000-strong SEC, which oversees roughly 40,000 companies, as well as how Wall Street companies and other firms operate, the people said.

After leaving the SEC, Atkins in 2009 founded consultancy Patomak Global Partners, located just around the corner from the White House. The firm has represented banks, financial technology firms and crypto companies in their dealings with the SEC and other regulators, according to its website.

A self-avowed free marketeer, Atkins will be a marked change from the current SEC Chair Gary Gensler, who was appointed by Democratic President Joe Biden. Gensler cracked down on Wall Street and crypto firms with a hard-nosed style that upset industry executives and even some congressional Democrats.

Atkins' SEC knowledge and expertise will put him in a strong position to unpick some of Gensler's rules, especially short-sale regulations and climate disclosure rules already facing lawsuits, as well as cryptocurrency accounting restrictions.

Still, Atkins is considered unlikely to fundamentally weaken the agency, a fear stoked by Elon Musk's role as co-head of a newly created government efficiency watchdog. The Tesla and SpaceX CEO has clashed with the agency and repeatedly attacked it.

"He (Atkins) grew up with the SEC and recognizes the important purposes of the agency," Richard Hong, a partner with Morrison Cohen law firm who joined the SEC as a lawyer while Atkins was a commissioner there.

Atkins and his representatives did not immediately respond to an email on Thursday seeking comment.

'DEREGULATION ZEALOT'

But not everyone is cheering Atkins on. Pro-regulation progressive groups, as well as top Democratic Senator Elizabeth Warren, were quick to flag concerns over his industry ties and record championing light-touch enforcement while at the SEC.

Atkins said at the time that big corporate penalties unduly punished shareholders who had already been hurt by the original misconduct. Speaking in February 2008 just months before the subprime mortgage crisis kicked into full swing, Atkins said the SEC should offer companies more transparency and predictability over enforcement probes and penalties.

"Atkins ... is smart, experienced, and capable. Unfortunately, he is also a deregulation zealot and industry cheerleader," said Dennis Kelleher, the CEO of Washington-based advocacy group Better Markets, who also noted that Atkins served in the Republican majority at the SEC in the years leading up to the 2008 crisis and the Bernard Madoff Ponzi scandal.

Others warned that Atkins may give free reign to the crypto industry, which donated heavily to support Trump's 2024 presidential campaign and has pushed for a new industry-friendly SEC leader who will end Gensler's crackdown. Gensler is scheduled to step down on Jan. 20, 2025.

Atkins has helped create best practices for crypto issuances and trading as co-chair of the Token Alliance, and is a member of the Chamber of Digital Commerce's advisory board. Bitcoin breached $100,000 for the first time on Wednesday on excitement over a SEC crypto policy overhaul under Atkins.

"Crypto companies' unprecedented political spending apparently just bought them control of the nation's investor protection police," said Bartlett Naylor, financial policy advocate at Public Citizen, a progressive consumer rights group.