Opening Remarks at the SEC Town Hall

Thank you very much for coming to our first “town hall” meeting together. To those of you here with me at our headquarters in Washington, it is so great to see you. And, let me add an especial welcome to you who are joining from our regional offices around the country.

I am pleased that we can meet today to discuss the SEC; our important mission on behalf of our fellow citizens, investors, and taxpayers; as well as some of my priorities as your new Chairman.

First and foremost, I take great pride in saying that it is a new day here at the SEC. We are returning to our core mission that Congress set for us. All of us can recite the familiar three-part mission enunciated by Congress in the Exchange Act:  protecting investors; furthering capital formation; and safeguarding fair, orderly, and efficient markets. We see these phrases on our website, on the walls of this building, in our public pronouncements. They are at the core of what brings us to work every day.

Investor protection is the cornerstone of our mission—to hold accountable those who lie, cheat, and steal. Capital formation is at the root of what we do. Otherwise, why have the financial markets? Capital formation—building a direct, economical route for investors’ capital to find its way to entrepreneurs and industry that put capital to work to create products and services that people value and willingly pay for, because these products and services make their lives some combination of better, healthier, safer, longer, more fun. This engine of growth employs people, helping them to work and save to achieve their dreams. It is responsible for lifting them out of the poverty that unfortunately has been the traditional state of humanity for millennia.

We should not overlook the part about fair, orderly, and efficient markets. Congress calls on us to ensure that our regulations balance costs and benefits, that they do not become too burdensome that they add needless friction to the marketplace, undermining the capital formation that yields so much benefit.

But, what if the SEC’s leadership has directed the agency, which oversees and is responsible for the markets, to lose its own fairness, orderliness, and efficiency? Does that undermine the markets’ own approach if their policeman comports itself with inconsistent values? Predictability, due process, rule of law, integrity are all part of what create respect and project a sense that one can get a fair shake without vindictiveness or ulterior motives.

Unfortunately, in the last four years until January, the SEC’s long-held reputation has suffered in that vein.

Two weeks ago today, I was sworn in by Secretary of the Treasury Scott Bessent in the Oval Office with President Trump; my family was by my side. It was an optimistic moment in the Oval.

I am honored by the trust and confidence that the President and the Senate placed in me to lead the SEC.

There are so many people to whom I am thankful for helping make my appointment by President Trump even possible.

As you know by now, I was a Commissioner from 2002 to 2008, after serving on the staff of two chairmen – Richard Breeden and Arthur Levitt. My time in public service and the private sector, both earlier in my career and more recently, has allowed me to see firsthand how regulations affect markets and investors. They can stoke innovation, facilitate investment goals, and create opportunities—or burdens—on businesses’ ability to compete and serve their customers.

So, how we implement regulations at the SEC is crucial; it is one thing to write a regulation, quite another for it to achieve its intended goal. Regulation ideally should be smart, effective, and appropriately tailored within the confines of our statutory authority.

It takes market experience and focused application to ensure that customers and investors of financial services firms benefit from efficient, effective, and well-designed regulation. Our goal at the SEC should be to facilitate those efforts, analyze their effectiveness, and use our enforcement power to cure and rectify wayward actions.

In short, clear rules of the road benefit all market participants.

Returning to this agency has been a pleasure. I have very much enjoyed seeing all the friendly faces, meeting with staff, and reconnecting with many colleagues I remember from years ago.

I know from my own experience that the SEC’s longstanding reputation for its dedicated and highly skilled professionals is justly deserved. Your knowledge and expertise continue to impress me. I want you to know that I value and appreciate you.

It is a high calling to work every day to protect investors, facilitate capital formation, and maintain, fair, orderly, and efficient markets. Thank you for your commitment to our mission.

I am grateful to Commissioner Uyeda—who once upon a time was my counsel—for his stewardship of the agency from January to April, a very productive three months. Thank you, Commissioner Uyeda.

As we look ahead, I am confident in the direction of our work. My experience over the decades will naturally inform my approach as Chairman. I told the press—who were peppering me with questions during the last crypto roundtable—that I have a list of priorities as long as my arm that I would like to achieve.

It should be no surprise that high on that list is a sensible approach toward crypto. From 2017 until my nomination, I worked to help develop best practices for the digital assets industry and saw firsthand how ambiguous or nonexistent regulations in this space created uncertainty and inhibited innovation. That lack of regulatory framework also invites fraud.

A top priority for me will be to tackle regulatory treatment of digital assets and distributed ledger technologies, providing a firm regulatory foundation through a rational, coherent, principled approach.

I thank Commissioner Peirce, our own “Crypto Mom,” who is working hard on this issue.  I am proud to say that she also was once upon a time my counsel when I was Commissioner. She is known for her principled and tireless advocacy for common-sense policy. I am confident that she is the right person to lead this effort to come up with a rational regulatory framework for crypto asset markets.

I am pleased with the efforts of the Crypto Task Force and the three roundtables it has held so far on defining security status, tailoring regulation for crypto trading, and custody considerations. I look forward to the input from industry and additional public feedback we will get during the next two roundtables on the topics of tokenization and decentralized finance.

This is important work. Entrepreneurs across the United States and around the world are harnessing blockchain technology to modernize aspects of our financial system. I expect huge benefits from this market innovation for efficiency, cost reduction, transparency, and risk mitigation.

This is a pivotal moment for our economy. Entrepreneurs, businesses, and individuals here at home and across the globe are eager to invest in America.

We will work together to protect investors from fraud, keep politics out of how our securities laws and regulations are applied, and advance clear rules of the road that encourage investment in our economy to the benefit of all Americans.

We will work together to ensure that regulations promote capital formation rather than stifle it. We will work together to ensure American investors get disclosures that actually help them understand the true risks of an investment.

Together, we will make every effort to ensure that the U.S. is the best and most secure place in the world to invest and do business. Americans should always feel utmost confidence when investing their hard-earned dollars to save and provide for their future and the future of their families.

I cannot say that the current times are not without uncertainty. Many of you have expressed your uncertainty to me. What will the course of the agency be? Will there be further cuts in headcount? Will we maintain regional offices?

I am in my third week at the SEC—my 10th working day is today. I thank Commissioner Uyeda for his work during the transition time to straighten out some urgent policy issues that we faced in the courts and some organizational issues as the new Administration came into office.

As we look forward, I am counting on Commissioner Peirce’s continued leadership of the Crypto Task Force. I would like Commissioner Uyeda to be an ambassador to IOSCO since I have enough to focus on at home. I also am happy to say that Commissioner Crenshaw has agreed to take on the SEC’s administrative law framework and procedure in light of the two Supreme Court rulings that in effect oblige us to rethink and reform this area. It is high time that we take that task to heart.

We have had departures—many of our former colleagues accepted retirement or separation offers. I count many of them as old friends, and I salute their service over many years.  The Offices and Divisions have decreased headcount by 15% since the beginning of the current fiscal year. These departures leave vacancies that in many cases need to be filled. When I left the agency in 2008, we had approximately 3,600 employees. At our height a year ago, we had approximately 5,000 employees plus 2,000 contractors. Today we are at approximately 4,200 employees and 1,700 contractors.

Tomorrow we will begin a process to review our technology infrastructure and our contractual obligations. This review is long overdue—call it a spring cleaning and reassessment of contracts, especially regarding information technology. We need to see what we have, where our vulnerabilities are, and how we can shore up and improve our systems.

We will work on optimizing our efficiency. There will be targeted, common-sense reorganization to come. We also have leasing issues to be resolved—notably in Los Angeles and Philadelphia. I am working on those issues and share your concerns. Unfortunately, about 11 years ago, the agency precipitously surrendered to the General Services Administration its control over leasing, which Congress specifically granted the SEC in the Exchange Act. That action puts me in a weaker position today.

Let me say unequivocally that I firmly believe in our regional office concept. We cannot and should not have everyone in Washington and New York. Risk management, human resource development, and practicality for our examination teams (to focus on one example) provide ample reinforcement for that position.

I also want to salute our regional teams for their expertise and collaboration across offices to find the best resources to assign to matters. At least one direct experience that I had in the past year in which my firm was an independent compliance consultant indicates that the SEC has advanced quite a bit in this coordination over the past couple of decades. Two of our SEC colleagues from the Miami office with necessary, specific expertise played a key role in uncovering problematic activity of a Philadelphia asset manager by meticulously analyzing trades—going back to the trade blotters—to build a case.

As I said at the outset of my remarks today, it is a new and brighter day for the SEC.

I am here to work, with each of you, on behalf of American markets and investors. We will work with our colleagues in the Administration, especially other financial services regulators, notably the CFTC and banking regulators, and, of course, with Congress to bolster the economy and build on U.S. leadership of the global markets.

Thank you for all that you do each and every day to advance our mission.

If you are joining us remotely today, thank you for participating. I look forward to interacting with you in person in the near future. For those of you here at headquarters, please join me for some refreshments right outside.

Thank you.