Feb. 8, 2024
Dear Securities and Exchange Commission (SEC), I am writing to underscore the critical link between public trust in the financial system and the health of our democracy, particularly considering proposed changes to margin call requirements. The erosion of public trust in regulatory institutions poses a profound threat to the foundations of our democratic society and can have dire consequences if not addressed promptly and effectively. In a democratic society, public trust in regulatory institutions such as the SEC is essential for maintaining the integrity and stability of our financial markets. When investors and market participants believe that regulatory bodies are acting in the public interest, it fosters confidence in the fairness, transparency, and accountability of our markets, thereby promoting economic prosperity and social cohesion. However, the erosion of public trust in regulatory institutions can have far-reaching and destabilizing effects. In the absence of trust, investors may lose confidence in the legitimacy and effectiveness of regulatory oversight, leading to widespread disillusionment and disenchantment with the democratic process. This erosion of trust can sow the seeds of political instability, social unrest, and ultimately, the collapse of democratic institutions. History has shown us that the loss of public trust in regulatory institutions can pave the way for authoritarianism, demagoguery, and the erosion of democratic norms and principles. The Great Depression of the 1930s, for example, fueled public discontent and disillusionment with existing political and economic systems, creating fertile ground for the rise of authoritarian regimes and extremist ideologies. Therefore, it is imperative that the SEC recognizes the profound responsibility it bears in upholding public trust and confidence in the financial system. Any proposed changes to margin call requirements must be guided by principles of transparency, accountability, and the public interest. The SEC must engage in open dialogue and consultation with stakeholders to ensure that regulatory decisions are informed by diverse perspectives and grounded in evidence-based analysis. Moreover, the SEC must communicate its actions and intentions clearly and effectively to the public, demonstrating a commitment to openness, responsiveness, and accountability. By fostering a culture of trust and transparency, the SEC can help safeguard the integrity of our financial system and uphold the principles of democracy upon which our society is built. In conclusion, the preservation of public trust in regulatory institutions is not merely a matter of economic stability, but a fundamental pillar of democratic governance. By prioritizing transparency, accountability, and the public interest, the SEC can help strengthen the bonds of trust that bind our society together, thereby safeguarding the future of our democracy for generations to come. Thank you for your attention to this matter, and I trust that the SEC will approach its regulatory responsibilities with the gravity and foresight that they demand. Sincerely, Michael Castellanos