▶ 0:14:18If we could ask everybody to take your seats, please. Committee on Financial Services will come to order. Without objection, the chair is authorized to declare a recess of the committee at any time. Today's hearing is entitled Oversight of the Securities and Exchange Commission. Without objection, all members will have five legislative days within which to submit extraneous materials to the chair for inclusion in the record.
▶ 0:14:47I now recognize myself for four minutes for an opening statement. Good morning. I want to welcome my longtime friend and our chairman of the SEC, Chairman Atkins, and thank him for joining us today. The SEC's mission is clear to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. At its core, this mission is about fostering public confidence in our markets. These are not suggestions. They're not partisan preferences.
▶ 0:15:16They are the statutory mandates enacted by Congress. Unfortunately, during the Biden administration, the SEC strayed from this mission. Instead of focusing on its core mandate, the commission pivoted towards politicized rulemakings that stretched far beyond the bounds of those core statutory authorities. A great disappointment. Former chair Gary Gendler, we witnessed a commission that relied frequently on regulation by enforcement rather than transparent rulemaking.
▶ 0:15:44We saw attempts to embed political and social objectives into securities regulation, all at the expense of American investors and small business owners. The consequences of this approach speak for themselves. Coupled with crushing compliance burdens, these policies accelerated the shrinking of our public markets. Since 2021, the number of publicly listed companies in the United States dropped by 10%.
▶ 0:16:09Leading entrepreneurs found their capital for growth in private markets, delaying opportunities for America's individual investors, small institutions, our unions, our 401k plans uh to have more investment choices. And that cuttingedge innovation was driven offshore by often regulatory That's why in December the House advanced the invest act.
▶ 0:16:35This strongly bipartisan legislation is designed to reignite our capital markets by cutting red tape, empowering entrepreneurs and small businesses, and expanding investment opportunities for all of our citizens. I want to commend Chairman Atkins for his efforts to reverse the prior rulemakings that hindered capital formation and for steering the commission back onto those fundamental enforcement responsibilities.
▶ 0:17:02These actions align with committee Republicans commitment to foster efficient, transparent and innovationfriendly markets that protect investors, provide regulatory clarity that markets need, particularly in emerging areas such as digital assets. It's imperative that Congress provide a functional and durable framework for digital assets. We look forward to sending a market structure bill to the president's desk in 2026.
▶ 0:17:29Today, we'll examine recent actions taken by the SEC and provide members with the opportunity to address any questions or concerns regarding the commission's current trajectory. We'll also set the uh assess the SEC's approach to digital asset regulation, examine steps being taken to depoliticize the proxy access process, and to review internal reforms of the commission itself. Our shared goal is straightforward.
▶ 0:17:56A marketplace where investors have the information and protections that they need to participate with confidence and where American businesses can access capital to innovate, expand, and create new opportunities for both jobs and investment. I look forward to hearing from Chairman Atkins, and I yield back the balance in my time. I now recognize the ranking member of our committee, Mrs. Waters from California, for four minutes for an opening statement.
▶ 0:18:22Thank you very much, Mr. Chairman, you and I have a very different understanding about what is happening at the SEC. Um, Chairman Atkins said it is a new day for the SEC. What did he mean? Did he really mean that this SEC is now putting Wall Street and billionaires first and America's investors last?
▶ 0:18:45Since his tenture began, Chairman Atkins has withdrawn 14 major proposals that would have protected retail investors, dismissed cases and investigations against Trump's crypto billionaire friends, paired back corporate disclosures that provide the public with critical information. Move to let private equity dump their failing investments into unsuspecting investors.
▶ 0:19:12restricted shareholders ability to influence the companies they own, halted the SEC's defense of the climate disclosure rule, even as the wildfires in California show there are material risk and cut SEC staff by roughly 20%. And at the same time, the president along with his family and closest adviserss continue to enrich themselves through what appeared to be insider training.
▶ 0:19:41self dealing and in both the equity and crypto markets. The SEC under chairman Atkins has yet to investigate a single instance of the potential large-scale fraud and market abuse being brazenly carried out by this administration and its allies. The SEC is also supposed to be an independent commission free from political influence at his confirmation hearing.
▶ 0:20:09Chairman Atkins said, "I want to take politics out of financial markets." And yet, in many of his public speeches, he has repeatedly pledged his loyalty to Trump more than 16 times. That is remarkable for the head of a supposedly independent agency. Additionally, today the SEC does not have a single Democratic commissioner. And again, uh this is extraordinary.
▶ 0:20:35and the SEC is not making policy in an open and bipartisan manner with the usual public notice and comment process. Instead, Atkins SEC appears to take its orders directly from the president and avoids public comment at all cost. None of this should come as a surprise.
▶ 0:20:56Over the past year, the executive branch and Congress under Republican control have become nothing more than a rubbish stamp for carrying out Donald Trump's personal agenda. From his arbitrary and inflationary tariffs to the use of public office to enrich himself and his friends through corrupt deal making to the weaponization of the DOJ against political enemies to repeated attempts to undermine the midterm elections to sending
▶ 0:21:26his own personal brown shirt style army into our communities that have killed Americans and terrorized our cities and towns. It is clear the federal government no longer functions for the people and by the people. It functions solely for Trump and by Trump by not enforcing the rule of law against the president and his friends were openly engaged in grift and corruption.
▶ 0:21:52Chairman Atkins is aiding and abetting this reckless and unlawful agenda. Chairman Hill, it certainly is a new day at the SEC, a Wall Street and billionaire holiday. I yield back.
▶ 0:22:08Gentlemen Hill is back. Chair recognizes the chair of our capital market subcommittee, Anne Wagner, for one minute for an opening statement.
▶ 0:22:14I thank you, Mr. Chairman, and welcome Chairman Atkins. Good to see you again. First, I want to thank you for putting capital formation back at the top of the commission's priorities. Your new progrowth agenda will make it easier for companies to go public, increase investor opportunities, and support innovation and entrepreneurship throughout the United States. My bipartisan Invest Act will cement that work.
▶ 0:22:43We're giving the American people more investment options. We're giving American small businesses the ability to expand. We're getting big government out of Main Street's way. Our bipartisan reforms in the Invest Act and your regulatory reforms at the commission could not be more aligned and I thank you for your partnership in these efforts and more. I yield back.
▶ 0:23:10Gentlewoman yields back. I recognize the ranking member of our subcommittee on capital markets, Brad Sherman of California, one for one minute for an opening statement.
▶ 0:23:18Mr. Chairman, a lot of people are concerned about the reduction of the enforcement staff at the SEC because they're concerned about the honesty of our capital markets and the role they play in the economy. But others, I think, are concerned about how your cutting back of that enforcement could lead to the impoverishment of our president, Donald Trump. You see, the way it's supposed to work is you're supposed to begin the investigations of those who are defrauding our investors.
▶ 0:23:47Then those who are likely to face criminal or civil penalties have to buy a lot of Trump coin. This then leads to hundreds of millions of dollars of profit for Donald Trump. We've saw this with Justin's son. We'll see this wink uh with the Winklo brothers, Brad Garlinghouse, Mr. Sha. But it all starts with you.
▶ 0:24:10And so I would urge you to reinvigorate your enforcement, catch those who are defrauding investors, and make sure that Donald Trump can make hundreds of millions of dollars each and every month. Thank you. Gentleman yields back. I'd like to recognize myself for a point of personal privilege. I want to thank two of our senior leaders here at the House Financial Services Committee uh that have served so well, both the committee and our members.
▶ 0:24:34First, uh, our council, Kyle Smithwick, uh, started the financial service committee as an oversight council before quickly taking the reigns of the subcommittee. He served as the committee's general counsel for former chairman Mckenry. We were lucky to have him on our team this Congress, and I appreciate his commitment to our robust agenda over this past year. We wish him the best when he goes to the US Treasury Department. And last but not least, Broo Nethercott is also departing the committee this week.
▶ 0:25:04Brooke served as our committee's deputy communications director. She's been integral to my team for several years in which we've made significant progress on a lot of my policy agendas. She was my communications directors for the second district in Arkansas and her energy and passion for Arkansas 2 is unmatched for somebody from Connecticut. Um the good news is she's not going too far. she'll go work for uh chairman Seal League at the CFTC as the uh head of their communications group.
▶ 0:25:33So, would you help me recognize these two fine people today? We welcome the testimony of the Honorable Paul Atkins, chairman of the SEC. Chairman Atkins, we thank you for taking time to be with us. You'll be recognized for five minutes to give an oral presentation of your written testimony. Without objection, your written testimony will be made part of our record. You're now recognized for five minutes. Uh well, thank you very much, uh Mr. Chairman.
▶ 0:26:02So, Chairman Hill, Ranking Member Waters, and members of the committee, it's a great honor to testify before you today. Thank you for this opportunity to discuss the work of the Securities and Exchange Commission. Nine months ago, I returned to the SEC with a clear mandate to recommmit the agency to our core mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.
▶ 0:26:28I am grateful to work alongside dedicated public servants who have hit the ground running in pursuit of these priorities. America's 124 trillion dollar capital markets are the deepest and most liquid in the world. They are a marvel of human ingenuity. Yet over the years, rules have multiplied faster than the problems that they were intended to to um solve.
▶ 0:26:52This Congress and the Trump administration are focused on bringing down the cost of living for the American people. And the SEC has a very vital role to play in that. For example, public companies spend $2.7 billion a year to file their annual reports. This is$2.7 billion dollars that companies are not reinvesting in their businesses to create jobs.
▶ 0:27:16$2.7 billion dollars that our disclosure regime is diverting from your constituents to corporate lawyers, accountants, and consultants. Now, this is not to say that we want to gut corporate disclosure at all, which is vital.
▶ 0:27:31But we must modernize, rationalize, and streamline reports so that they are meaningful, understandable, and not a repellent to investors like this 10K here from uh Energy, which is just shy of a thousand pages long. After all, how many of you would read through an annual filing that this is certainly doubles or if not more uh war and peace? Disclosure documents of this sort of length can do more to obscure than to eliminate.
▶ 0:28:02[snorts] For context, shortly after I left the SEC in the mid 1990s, there were more than 78 companies that were registered with the US. by the time with the US SEC by the time I returned as chairman that figure had fallen by roughly 40%. So this trajectory tells a cautionary tale that the SEC is working to rectify through the three pillars of my plan to make IPOs great again. First, reanchoring disclosures immateriality.
▶ 0:28:31Second, depoliticizing shareholder meetings. And third, allowing public companies to have litigation alternatives so that we shield investors from the frivolous and innovators from the frivolous and investors from the fraudulent.
▶ 0:28:47I also applaud the bipartisan initiatives before Congress, including those in the Senate's Empowering Main Street in America Act and the House's Invest Act to help keep America's capital markets open, dynamic, and above all worthy of investors trust. Of course, I also support congressional efforts to enact the Clarity Act. Upon its passage, the commission stands ready to implement this landmark legislation.
▶ 0:29:16A federal framework for crypto markets is long overdue. Under Commissioner Hester Pur's leadership of our crypto task force, SEC staff has provided more clarity in the past year than in the total prior decade. But there is no action that we can take that future proofs our rulebook more formidably than nonpartisan market structure legislation.
▶ 0:29:39As Congress completes its vital work, CFTC Chairman Mike Seelig and I intend to provide a bridge towards legislation through our now joint project crypto. We will consider a token taxonomy to offer both investors and innovators a clear understanding of their regulatory obligations. We will also look to consider exemptions that would allow market participants to move and to transact on chain.
▶ 0:30:07Finally, and most fundamentally, capital markets thrive on many factors, but they endure on trust. So, the SEC is returning its enforcement program to first principles of rooting out fraud, and remedying investor harm. Since I rejoined the commission, we have brought enforcement actions to address offering frauds, insider trading, accounting and financial frauds, and breaches of fiduciary duty by investment advisors.
▶ 0:30:35Since the formation of our crossber task force in the fall, meanwhile, we have suspended trading in the stocks of 14 Asi-abased issuers upon evidence of potential market manipulation. I'm working within the securities laws to protect investors from those who seek to use international borders to evade and undermine US investor protections. Markets are global. Investor protection must be as well.
▶ 0:31:04As I said at the outset of this testimony, the SEC is returning to its core.
▶ 0:31:09Gentleman's time is expired.
▶ 0:31:12Thank you, Mr. Chairman. We'll now turn to member questions. I'll recognize myself for five minutes for questions. You referenced uh Energy. We're proud of Energy, the publicly traded utility that power in the state of Arkansas, for example. thousand pages for a a 10K. And you and I both have studied a lot of commentary over the years that Warren Buffett's made about the disclosure systems.
▶ 0:31:41I think we both quoted the exact same uh quote this fall after he issued a a letter in November about the proxy. He said that there were a lot of overlapping rules that had caused the proxy to balloon in size and really I think diminish its some of itsformational benefit to shareholders.
▶ 0:32:00We compared on the committee 1980, 1990, 2000, 2010, and 2020 proxies for four or five companies that were members of the uh Dow Jones Industrial Average and the S&P 500 for all of those reporting periods. And they went from 15 to 20 pages to over 300 pages. What's your guiding force on as you look through the regulatory disclosure regime on how we can lower that cost? What's a specific element? You referenced it in your opening statement.
▶ 0:32:28Uh well, thank you, Mr. Chairman. Uh yeah well uh it comes down to materiality that's the bedrock of the securities laws and it's written into 10B section 10B of the exchange act and the most important seinal uh supreme court decision was written by uh Thood Marshall back in 1976 where he warned about the danger of information overload where you know if things are not stuck to materiality which the court
▶ 0:32:58defined as what a reasonable investor needs to know in order to buy, sell or hold securities basically or vote shares. Um, and so that's really the the bedrock. And I remember when I was a a little boy, my father going through annual reports and and whatnot, proxy statements back then, one could do that. And I really challenge anyone to I can't even, you know, lift sitting here lift this two more than two reams of paper.
▶ 0:33:25Thank you for that. So in in in addition to that, I think corporate governance has really seen a big change since you were on the commission last time in the early 2000s in regard to proxy access and how corporate secretaries and boards deal with proxies being solicited for various And recently the DC circuit court in 2024 decision in ISS versus the SEC held that proxy voting advice does not constitute a
▶ 0:33:55solicitation under section 14A of the exchange act effectively eliminating the commission's regulatory over authority of the proxy advisory firms. This decision creates a significant oversight gap for an industry dominated by just two firms, both of whom happen to be uh foreignowned, ISS and Glass Lewis, which control 95% of the proxy advisory market for institutional investors.
▶ 0:34:23Glass Lewis recently announced it will offer open quote custom voting frameworks close quote tailored to individual client preferences rather than applying a uniform policy across all its clients. This pivot raises a fundamental question about conflicts of interest, the methodology, transparency, and whether investors receiving this advice understand the basis on which it's being provided.
▶ 0:34:46Does the commission view this new approach as sufficient or does it underscore the need for a different regulatory direction? Mr. chairman. Uh well, we are definitely looking at this whole um ecosystem uh you know, with respect to corporate governance and shareholder proposals and and part of the uh the problem I think is with these advisory firms is that they're more of a symptom of the underlying problem and that's the weaponization of uh shareholder proposals and those government
▶ 0:35:17sort of uh um uh uh uh framework. So anyway, so we are uh actually actively actively looking at it and that's part of the threepoint program to try to make uh IPOs great again and make it uh cool to be a public company again. If Congress were to amend section 14A of the Exchange Act to explicitly cover proxy advisory firms, how would the commission use that authority?
▶ 0:35:44What what would be the methodology uh to have a rigorous standard for transparency? Well, I think mostly it's uh fiduciary duty and you know living up to what their standards should be. Uh both of them now I understand are um registered as investment advisors. Uh so um you know we we have a hook there but but again I you know h we're happy to work with you all as as you
▶ 0:36:12did you regret your uh vote during the first time you were on the commission about offering a safe harbor for proxy advisory advice.
▶ 0:36:20Well actually I did I voted no uh on that rule and unfortunately the the safe harbor was the thing that
▶ 0:36:28t my time's expired. Thank you for that discussion. now recognize the ranking member for five minutes for her
▶ 0:36:35Thank you very much, Mr. Chairman. Chairman Atkins, on January 15th, my colleagues and I sent you a letter detailing our significant concerns about the SEC's dismissal of over a dozen crypto actions. Our concerns are twofold.
▶ 0:36:53First, these cases were dismissed despite the fact that the SEC was winning in court, proving that the SEC's crypto enforcement program was well grounded in the law. And second, that the people who benefited uh from your well about face were also people who gave millions of dollars to President Trump and his family.
▶ 0:37:20I am most astonished by the case of Justin Sun, founder of the Tron Network. The SEC's complaint alleged, among other things, that Sun engaged in hundreds of thousands of manipulative trades to artificially inflate the price of his crypto token, In the fall of 2024, a federal district court judge found that Sun had defrauded TRX investors and
▶ 0:37:50that TRX is a security. Despite this holding, the SEC stayed his case against Justin Sun in February 2025 to explore a potential resolution. Well, while you were exploring a potential resolution, Mr. son has been busy ingratiating himself within Trump's orbit.
▶ 0:38:14He has invested over 75 million in the world liberty financial tokens and is the top holder of the dollar sign Trump meme coin which earned him an invitation to the White House in a special dinner with the president. Just last week, a person verified to be Mr. son's ex-girlfriend stated publicly that she has detailed evidence that Mr.
▶ 0:38:41Sun manipulated the price of TRX using fake trading accounts and uh noted she is willing to provide evidence and testify in support of these allegations. Chairman Atkins, you have said that under your leadership the SEC will focus on real fraud. Yes or no? Does your statement extend to fraud in the crypto markets?
▶ 0:39:10I'm sorry.
▶ 0:39:10Yes or no?
▶ 0:39:11Does your statement extend to fraud in the crypto markets?
▶ 0:39:16Well, whatever involves securities.
▶ 0:39:20Okay. Is the SEC going to continue to prosecute his fraud against Justin son? Yes or no?
▶ 0:39:28Well, I can't discuss anything about it
▶ 0:39:31Okay. So will you commit to giving the committee a confidential briefing on the
▶ 0:39:37Happy to talk to the extent I can about uh about matters
▶ 0:39:41given that courts have ruled that TRX is a security and therefore within the SEC's jurisdiction. Do you agree that the SEC has a responsibility to obtain additional evidence offered by Mr. Sun's ex-girlfriend? Yes or no?
▶ 0:39:57Well, again, I can't comment on any ongoing matter. Will you commit today that the SEC will continue to investigate and prosecute fraud even if that fraud entails crypto assets that are securities such as in the case of Justin Sun and TRX?
▶ 0:40:17Again, we are that's our job is to investigate fraud that uh you know involves securities. Uh so wherever it may be,
▶ 0:40:25M. Well, I want to tell you, you made a commitment. Uh, you came in, you talked about you were going to deal with fraud. It's right before your eyes, and you you you we all we on this committee are going to keep on until we get to the bottom of this fraud. So, will you give us a confidential briefing on this
▶ 0:40:47To the extent the rules uh allow me to do that. So, yes, but
▶ 0:40:52I would appreciate that and thank you very much. I yield back. Gentleman yields back. Chair recognizes the gentleman from Michigan, the vice chairman of the financial service committee, Mr. Heisinga. You're recognized for five minutes.
▶ 0:41:03Thank you, Mr. Chairman, and uh good to see you again, Mr. Atkins. Appreciate your time here. Um I got a lot to cover here. So, [clears throat] uh but you've been vocal about your efforts to modernize and streamline shareholder disclosures. Amen. Allelujah. Uh over the past 20 years, it's become easier for investors to access and view fund disclosures electronically. Uh e delivery makes sense. Uh it's seamless and convenient, saves money, reduces waste, and reflects investor pre preferences.
▶ 0:41:31SEA SEC action on this uh subject would bring fund disclosures in line with similar e delivery cha changes that have been made by the IRS and FINRA just this year, the Department of Labor in 2020, the Social Security Administration in 2016 and the federal in and uh retirement system known as the uh federal thrift savings plan the TSP uh did that in 2003 over 20 years ago. So we are subject to that actually.
▶ 0:41:59So, does the commission ha plan to engage in rulemaking related to e delivery?
▶ 0:42:05Uh, yes. Uh, we are actively uh looking at all of that.
▶ 0:42:10Well, I'd be remissed if I didn't mention uh that Congress has now moved my bipartisan e delivery bill, improving disclosure for investors act twice now through the house and there's broad support for this issue. So, I'd encourage you to continue on with that. Yeah, I've instructed the staff to to work on that.
▶ 0:42:29Well, thank you. All right. Uh, moving on to another favorite subject of mine, uh, the PCAOB, uh, the public company Accounting Oversight Board. As you know, I've advocated for years that the PCAOB should be folded into the SEC. Given the polit politization of the board over the years, I think this makes sense. Uh under the Biden administration, the PCAOB issued uh prescriptive rules that imposed high compliance costs while its budget increased at a rate significantly faster of that of your own SEC.
▶ 0:42:59Uh with annual salaries of board members exceeding half a million. Uh I was glad to see that the SEC recently approved the PCAOB's budget totaling $362.1 million, which is a 9.4% 4% decrease from the prior year including a 52% and a 42% reduction in the chairman's and the other board members compensation uh respectively. Uh I know that a new board has been recently appointed. What plans do you have that will further streamline the PCAOB?
▶ 0:43:30Uh well so uh thank you for that. Uh I uh yesterday actually I swore in the new uh chairman and uh new members of the board. So looking forward to their work. they are uh well steeped in uh you know the uh you know what it takes and and should take to do audits and uh and oversee that. So I really I I'm you know have a lot of confidence in them.
▶ 0:43:54So we will be working with them uh to and uh you know very closely to to try to um you to to work on their
▶ 0:44:02well I look forward to hearing more about the plans how to streamline that. Um I've got about two minutes left. I want to uh briefly touch on the SEC climate disclosure rule. As oversight chairman of last Congress, I spent a considerable amount of time trying to understand how and why the SEC finalized this overreaching rule. U there was litigation. Uh then the rule was voluntarily paused by chairman Gendler. Then acting chair UEA uh under him the board voted to end defense of the rule.
▶ 0:44:30And really frankly this has become a mess. So because of the oversight work of our committee did in in Congress, we were able to prove that the SEC not only lacked expertise, they their own admission, but the authority to issue climate disclosure requirements for publicly traded companies. You cited materiality earlier. Chair Atkins, can you update the committee on the status of the rule and where the SEC plans to go next with it?
▶ 0:44:54Uh well, thank you. Uh this the rule is stayed. You're right. And uh it's before the eighth circuit. Uh and so the circuit uh has uh sent us a couple of letters uh and so we are actively uh uh you know considering our our next step. So but uh you know let's suffice to say that uh we'll be guided by materiality as a standard of uh you know how we approach this issue.
▶ 0:45:19Okay. I'd like to explore that more maybe at another time. Um, finally, in the last administration, the SEC and the CFTC fined dozens of firms more than a billion dollars for failure to keep records of off-ch communications. Uh, let me remind you, last year it came to light that the SE SEC's IT department had supposedly inadvertently deleted a large swath of former SEC chair Gary Gendler's text messages. Oops.
▶ 0:45:43Um, so do you have plans to propose updated common sense recordkeeping rules that would give firms clear and reasonable guidance with what records they need to keep?
▶ 0:45:56Yeah, we uh are definitely working on that. I've instructed the staff to do that. Uh the crazy quilt of different standards for different types of uh um market participants that like broker dealers, advisers,
▶ 0:46:10gentleman's time is credit rating agencies. So, we're working on that. Thank you.
▶ 0:46:13And I will have one more question in writing to submit. I yield.
▶ 0:46:16Gentleman yields back. Gentlewoman from New York is recognized, Miss Velasquez, who is the ranking member of the House Small Business Committee.
▶ 0:46:24Thank you, Mr. Chairman. Um, Chair Atkins, I would like to follow up on the ranking member Waters uh line of questioning. Since becoming chair, the commission has pulled back from a remarkable 61% of the cases uh against the crypto Do all these cases have the same legal or evidentiary
▶ 0:46:55deficiencies?
▶ 0:46:57Uh well, thank you. uh most of those were uh withdrawn or or changed before I arrived in last April. Um but uh I can say that um uh you know what we're trying to do is realign to what the the statute uh hopefully will be the the market structure uh statute and the outlines that I've uh given um in a couple of speeches regarding uh you know how we view the taxonomy and
▶ 0:47:27the structure on crypto. So, I um I bring this up because of the 23 cases the SEC inherited, 21 from the Biden administration and two from the first Trump administration. There has not been a notice not noticeable change in the facts of these cases to warrant the SEC's decision to pull back from these cases.
▶ 0:47:56Do you know what many of these cases do have in
▶ 0:48:04Well, uh, depending on which ones you're talking about, most of them, uh, from my memory have to do with registration section five under the 33 act and, uh, and actually the SEC has a rather mixed record in court, uh, regarding those.
▶ 0:48:18Okay. So, uh, according to the New York Times, the defendant in most of these cases has close ties to President Trump. Uh, Mr. Chairman, I ask unanimous consent to in uh, submit this article into the record.
▶ 0:48:35Without objection will be included. So, you're telling us the SEC decision to drop or pull back from most of the crypto cases the SEC inherited have nothing to do with the $1.2 billion dollars the president and his family have made from the crypto industry since taking office. Well, again, I was involved in many.
▶ 0:49:00It depends on which ones you're talking about of those decisions, but I can't imagine that my colleagues would have been swayed by that.
▶ 0:49:07Well, Mr. Atkins, uh, you yourself are reported to have close ties to the crypto industry, holding approximately $6 million in crypto related assets prior to being sworn in. So you are also telling us that your $6 million in cryptoreated assets has nothing to do with the SEC decision to pull back from this enforcement. Uh Mr. Chairman, I yield back.
▶ 0:49:35Gentlewoman yields back. Chair recognizes the gentleman from Oklahoma, the chair of our monetary policy task force. Mr. Lucas, you're recognized for five minutes.
▶ 0:49:43Thank you, Mr. Chairman, and thank you, Chairman Atkins, for being here today. Under your leadership, the SEC has approved two more clearing houses, two more clearing agencies, I should say, to offer Treasury clearing. This is a welcome development and certainly a positive step as we move toward full implementation of Treasury clearing rule.
▶ 0:50:02And I appreciate the update from Commissioner Uda earlier this week as this is an immense undertaking for the industry and should warrant robust Is the SEC incorporating feedback from market participants and what still needs to be addressed to ensure there are no disruptions to the Treasury market at the end of this year?
▶ 0:50:24Oh, thank you. That's a very uh important issue, the Treasury clearing uh process and changes to that uh very important uh market. So yes, we're working closely with Treasury and with uh the industry to make sure that as this goes forward that there won't be any hiccups in it and to make sure it goes smoothly. And on that same thought, Mr.
▶ 0:50:46Chairman, I was also pleased to see that the SEC requested comments on a proposed change to extend an existing cross margining agreement to end users in order to reduce cost and make clearing more efficient. Can we expect a resolution to the proposal? Well, before the clearing rule is live, market participants need sufficient runway to execute those changes.
▶ 0:51:13Amen. I think uh you know, we want to make sure that things go smoothly, that there are no hiccups there with it and that people have plenty of notice and and ability to uh uh to gear up for those changes. And I know it almost goes without saying, but I hope you work closely with the banking regulators to ensure capital rules recognize the risk reducing benefits of netting across
▶ 0:51:38Yeah, that's important for uh for the market itself and to be efficient with capital. Chairman Atkins, for decades, public school teachers and charity workers have been barred from accessing many lowcost investments that their private sector 401k counterparts can use. Given your commitment to modernizing our capital markets, do you agree that we should no longer deny nonprofit employees access to these coste effective vehicles?
▶ 0:52:10Uh it sounds like a you know it's something that needs to be done.
▶ 0:52:13And my bill HR 1013 which was introduced included I should say in the invest act finally amends federal securities laws and provides parody for 403b plans. Turning to the crypto task force I understand you've contemplated an innovation exemption for tokenized equities. Our current capital markets are the envy of the world and of course must be safeguarded.
▶ 0:52:41Will you ensure that the commission seeks broad and diverse stakeholder input through the notice and commitment process to mitigate unintended consequences of potential exemptions?
▶ 0:52:53Uh yes. So I know some comment is important but the innovation exemption that I've been talking about would be you know cabin time limited transparent and really anchored in strong investor protection. So we would police that uh uh you know carefully and it's it's like a sandbox but not picking winners and
▶ 0:53:14Thank you for your responses chairman and I look forward to a productive coming months. With that I yield back Mr. Chairman.
▶ 0:53:21Gentleman yields back. Chair recognizes the ranking member of our capital markets subcommittee, Mr. Sherman of California, recognized for five minutes.
▶ 0:53:28Uh, Mr. Chairman, you show us how long these statements can be. Uh, I haven't read the whole thing. uh but I'll point out that the analysts do and that the market price that that trans security trades reflects uh the opinions of dozens of analysts who have read the whole thing and that assures a fair price for buyers and sellers and we need as much disclosure as possible including quarterly reports.
▶ 0:53:58Um you mention uh Uh materiality as you quote uh the court is what a reasonable investor thinks is important and there is an effort uh by some even in this committee but certainly in Washington to brand as crazy or unreasonable the millions of investors around this world who look at climate as material. They want to know. They want to base their investment decisions on the effect that the company has on climate.
▶ 0:54:29And I would say that your duty to provide information to uh investors is just as great with regard to climate investors as investors who are looking uh at something else. Um we talk about uh uh you mentioned in your opening statement some $2.7 billion in costs.
▶ 0:54:49Uh, I'll point out that in 2024 there were $8.2 billion in fines uh uh levied and that's just the tip of the iceberg uh your pred because not only do you have that recovery but think of all of the shenanigans that are deterred for everyone uh that every fraudster who's apprehended. Uh Mr. Chairman, uh, I want to thank you for your time speaking about some of these issues yesterday.
▶ 0:55:20Would two Democratic commissioners for the SEC make, uh, the SEC better? Uh well, I I leave that to the president and and the Senate uh you send commissioners, but uh you I've been now at the SEC for in and out for 35 years, and I've seen how it's worked and it works well with uh with five commissioners, but I've seen it with uh when Arthur Lev and Steve Walman were commissioners, and that was
▶ 0:55:50uh you know, too. And so I mean it's uh so the work gets done but uh it's good to have a lot of uh input and so I would be happy to work with whomever the president sends our way.
▶ 0:56:01Thank you. There are some great bills that have passed this committee sometimes repeatedly but unfortunately we have a United States Senate. Fortunately we have a commission that could do all these things without us Uh Mr. Heisinga points out that the e delivery bill is meritorious and something that you can adopt by rule.
▶ 0:56:27And I will also focus your attention as I did yesterday on the BDC uh bill uh which um uh is of course part of the invest act and uh freestanding legislation that would finally allow BDC's as a practical matter to be included in indexes.
▶ 0:56:48Um the next issue is the registered mortgagebacked securities that is to say mortgages in pools uh that where the mortgages have not been guaranteed by Fanny or Freddy since the SEC adopted regulation AB2. Not a single one of these pools has been out there because this regulation requires 270 data points about every loan.
▶ 0:57:15So, if you have a thousand loans in the pool, that's 270,000 data points. And I suggest a document even longer than the one sitting near your left hand. Uh, can you will you take a look at this regulation and uh give us a regulation where we can have uh registered mortgage back securities that are not guaranteed by Fanny and Freddy?
▶ 0:57:36Uh, yes sir. That's uh high on our list and that's a crying shame. That's the state of the market. uh like to turn your attention to data protection. Uh David Scott uh has an excellent bill that I've joined with him as have others uh dealing with SEC da this SEC data protection act.
▶ 0:57:58Um and uh I wonder if uh you will take a look at that bill, take a look at the data security at the SEC and come up with a program that reflects the need to keep the data secure. That is a big priority after we've seen what's the mishaps that have happened in the past.
▶ 0:58:20I yield back.
▶ 0:58:21Gentleman yields back. Chair recognizes the distinguished gentleman from Texas, Mr. Sessions. You're recognized for five
▶ 0:58:28Mr. Chairman, thank you very much. Uh chairman, welcome to the Financial Services Committee. We're delighted that you're here. I'm sure when you walked in this morning, I as you know, I saw you in line waiting out in the cold. Uh today we are in the middle of a memorial service for a former colleague Doug Lamoff, a congressman of our friend who passed away from California. So normally this uh body would be full waiting to to speak with you.
▶ 0:58:56So I simply offer a bit of information. Chairman, I saw you outside and had a chance to engage you. You're aware that your crack staff learned last night that I would be here and have several questions and I'd like to refer to those as an overall SEC actions and inaction some things that you uh agreed to take on by virtue of the job and things that responsibility that you have agreed
▶ 0:59:27to take on now. And I note in looking at your background in 1983, you were senior student writing editor of the Vanderbilt Law Review. And I consider that very favorable because you too recognized as a student you wrote much. You expressed your opinion, but it was essentially providing to someone else information that you agreed with.
▶ 0:59:53I think we find ourselves as members of Congress as as uh writing students also many times to agencies of the federal government. We write a lot of letters and we wait and sometimes hear things back.
▶ 1:00:08I want to say that I have found your your uh breath of fresh air is helping, I hope on a bipartisan basis, but I know for myself to address issues that are still actions and inactions that the SEC has taken up over the last few years. I would say to you, I am interested in also your work and really wish to compliment you.
▶ 1:00:38uh because of the things that you have taken on including what might be called uh your uh regulatory flexibility agenda which I enjoyed which you released in September and intend to do this year to offer flexibility reminding us as you did that you are for making sure that growth and investment opportunities happen to investors around this country that be
▶ 1:01:08uh proactive and and also reactive to help us. I would like to tell you that we held under an Wagner, chairman Anne Wagner, a hearing that discussed from an IPO perspective that has been spoken a little bit about today, but I come at this as co-chairman of the biotech caucus.
▶ 1:01:30Biotech is the future energy that America stands a leg up on and supporting uh against our adversaries around the world. Who will develop the next great uh not just biioarker but bio breakthrough to supply the free world with a better opportunity.
▶ 1:01:53And in in relationship to this, we found out in testimony that I believe your staff has been provided that the the testimony was up to 50% of IPO dollars went simply to compliance.
▶ 1:02:09And I think you spoke well about this, not just your knowledge base about trying to reduce regulatory costs, but the knowledge that this competes against America's best interest to uh be competitive with world markets, with other people who do not have the same rules and regulations we do.
▶ 1:02:32At no point would I back you away from or caution you not to go to what's in the best interest of the investor who could find themsself in a in a a market like that of not knowing the truth about what's next. But I would say to you that I provided your staff last night with several very specific items.
▶ 1:02:56you were very magnanimous today in line and said without calling me by name. You would make sure that this agency uh picks up the pace and does intend to not only follow the items that we talked about but become more transparent in the relationship with members and the marketplace and I want to applaud you.
▶ 1:03:24I felt like that you standing in the cold was a good time to engage you and it worked. Mr. Chairman, I would yield back my time in thoughtful consideration to the staff and our new young chairman for his role and work. Thank you.
▶ 1:03:37Chairman yields back. Chair recognizes the distinguished gentleman from New York, Mr. Meeks, the ranking member of the House Foreign Affairs Committee for five minutes.
▶ 1:03:46Thank you, Mr. Chairman. What I'd like to say first, you know, I uh look at across our country and I see hardworking families invest in the stock market to build a future. These are not day traders or large market players. They are teachers, firefighters, and nurses saving through mutual funds, pensions, retirement at plans like 401ks, IRA.
▶ 1:04:17These are everyday Americans. They rely on strong, fair, and accessible markets. We work for them. I'm I was pleased in fact to co-lead the Invest Act late last year with Chairman Hill, Chairwoman Wagner, Congressman Godheimr, and I was even pleased more when the House passed the bill with a strong bipartisan vote signaling that both Democrats and Republicans support modernizing rules to empower small businesses and everyday people.
▶ 1:04:47We did our job here. But I also believe in that we have to work for those American people. We've got to make sure that they are protected uh you know and uh and uh their investments are as sound as we can do it. So Mr.
▶ 1:05:04Atkins, my question to you would be as a successful person in the financial uh industry, would you ever recommend that someone take financial advice from their let's say their favorite celebrity?
▶ 1:05:22From a celebrity, is that what you said? Or well, I I
▶ 1:05:25would you I mean I mean yes or no. Would you just tell somebody they should just take financial advice from a celebrity?
▶ 1:05:31You should check out the background of the person. Yeah. because you would not ever and you have not ever taken financial advice from your favorite celebrity that you may have had. That's correct. I would assume so.
▶ 1:05:41Well, it depends if there Warren Buffett's a celebrity. But uh anyway, but uh
▶ 1:05:45and and the reason I bring that up is this. Back in 2022 when the SEC brought enforcement action against a celebrity TV star, uh at that time it was Kim Kardashian. The SEC warned investors to use caution with celebrity endorsements of investment products.
▶ 1:06:05Just because it's being promoted by a well-known figure doesn't mean it suits every investor's risk tolerance or financial I happen to think that's absolutely But we also have a similar situation Just a few weeks ago, five Trump affiliated exchange traded funds under the name Truth Social America First EFTs were launched.
▶ 1:06:36It is meant to attract Trump fans who align with a patriotic America first agenda. Now, I'm not sure what that means for the investment product, but most of these investors seem to be drawn to the product because of the Trump name rather than understanding of the investment product. Seems to me that was just like Kim Kardashian.
▶ 1:07:02And we do have happened to have before he was elected still a TV reality star now sitting in the White House. So my question to you, Mr. Atkins is how is the SEC evaluating investor protection risks when a financial product is tied to a high-profile political figure or celebrity, particularly when retail investors may be drawn in by name recognition or perceived trust rather than a real understanding of the product's risks and especially
▶ 1:07:32when that figure happens to be the president of the United States of America. Well, there's uh our our rules are geared towards uh uh disclosure of material uh information and so and the risks uh therein and so without speaking to any particular type of product you know that's the really essential thing that investors need to look at and again that's why we need to have good tailored uh disclosure that's material and not
▶ 1:08:02ob there's a lot to offiscate
▶ 1:08:04so I agree but so what I want to do I got the you the last 42 seconds. I just want to know, will you commit to providing this committee in writing a clear description of the SEC's internal process for handling, evaluating, and approving decisions on the Trump affiliated ETFs so we can confirm that the process was independent and focused on investor protection and free from pressure
▶ 1:08:34and influence from the White House because we are here for the American people not to do the workings of the White House. We want to make sure it's free and clear of that. Can we get your commitment to do that?
▶ 1:08:45Well, we're happy I without any particular uh investment, I'm happy to provide you with uh our procedures of how we review filings and uh for gentle
▶ 1:08:57Thank you. Feel free to expand on that in written answers to the gentleman's question. Chair recognizes the gentleman from Texas, Mr. Williams, who is the chair of the House Small Business Uh, thank you, Mr. Chairman, and thank you for being here today. Appreciate it.
▶ 1:09:12While a number of proposals affecting registered funds and advisors from the prior administration were not ultimately adopted and have since been removed from the rulemaking agenda, the SEC did finalize several find related rulemakings in recent years that have a significant operational and compliance implication. One example is a 2023 amendment to the fund names rule.
▶ 1:09:34Chairman Atkins, in cases like this, how is the commission evaluating whether recently adopted rulemakings are operating as intended and what tools does the SEC have to address aspects of those rules that may lead to unintended consequences from funds or investors?
▶ 1:09:50Uh well, thank you for that question very much. Uh you know, I've asked my division directors uh to and their staffs to uh review uh rules. I think it's good to have a retrospective review to see exactly how things are are working. We also get lots of uh suggestions and comments from the industry and from investors. So um the names rule is just one of one example of all that. Uh now for many small and mediumsiz businesses, I'm a small business owner in Texas myself.
▶ 1:10:21uh the regulatory uh regime put in place by past administrations was t too far burdensome and prevented them from taking necessary steps to access public markets. Uh these businesses also faced roadblocks when attempting to access private markets as there were too many rules regulating who could invest in private markets. So many businesses were left with few very few options to raise the necessary capital to continue to expand their operations.
▶ 1:10:45Now, when regulatory frameworks make it uneconomical for small and midsize companies to enter public markets and overly restrict who can participate in private markets, capital does not become safer, it becomes scarcer. So, my question is, can you elaborate on how the SEC's renewed focus on facilitating capital formation is helping ensure that small and midsize businesses, main street America, are not priced out of public markets or boxed out of private capital altogether? Uh well that's a very important issue.
▶ 1:11:15Thank you very much for raising that. Uh but again uh you know one of my main focuses now uh is to make IPOs great again and to do that is to help cut down on the burden that of of uh disclosure that is not material. Second is the litigation uh issues if we can help ameliorate that and third is the um the the third impediment is is basically corporate governance weaponization.
▶ 1:11:43So uh those sorts of things help to uh uh you know keep people out of the public markets or make it unattractive and with respect to smaller businesses we need to make sure that our rules are fit for purpose that can encourage it. there are various uh provisions of those uh regs that we have that are meant to uh try to help small businesses have better access to it.
▶ 1:12:08And so that is a big effort that we will be doing over the next couple years to um to make sure that that is encouraging them and helping them to uh tap those markets for capital.
▶ 1:12:20Well, small business has great opportunities this year to grow and take advantage of some things. U lastly, entrepreneurs continue to face a challenging environment when it comes to securing growth capital driven in part by rising regulatory compliance costs, but also the concentration of investment activity in a handful of major financial hubs. Now, for many businesses operating outside these traditional hubs, accessing capital can present different structural challenges.
▶ 1:12:45These dynamics often constrain growth and limit economic development in communities that rely on entrepreneurial investment. So my last question would be chairman, how do capital formation challenges differ for businesses located outside of traditional financial hubs and how can the SEC help ensure capital markets survive main and main street as effectively as Wall Street?
▶ 1:13:06Uh well again another important issue and so in your state for example I mean there's a lot more um uh efforts I think uh for for new entrance uh into uh financial services outside of the big money centers New York and uh and elsewhere. So for example the new uh Texas stock exchange uh um there and then also the New York Stock Exchange and NASDAQ are are moving operations to Dallas.
▶ 1:13:32So I think all of those sorts of uh examples uh you know will will help uh if you will democratize access to uh the markets and and uh in the in different regions of the United States.
▶ 1:13:47So what you're saying is Texas is the greatest state in America.
▶ 1:13:51There you go.
▶ 1:13:52Thank you for that. I yield my time
▶ 1:13:57Gentle gentleman is from Massachusetts is recognized. Mr. Lynch, who's the ranking member of our digital assets, financial technology, and artificial intelligence subcommittee.
▶ 1:14:06Thank you, Mr. Chairman.
▶ 1:14:11Uh, Mr. Akens, I want to talk about Binance. Uh so um Binance uh which is a major crypto exchange was was charged and plead guilty to providing finances to among a number of groups Hamas, ISIS, al-Qaeda, Islamic Jihad, the Islamic Revolutionary
▶ 1:14:41Guard in Iran. bunch of sanctioned people in North and assorted criminal networks involving sexual uh child sexual abuse. The SEC dismissed that case two months after you arrived. But it gets worse.
▶ 1:15:10Two more months after you had arrived, after that that case was dropped, President Donald Trump gave an unconditional pardon to Changpang Jiao, who was the CEO of that that company. They did he did receive a 4month prison sentence, but the record of his conviction was was pardoned.
▶ 1:15:36The company did pay a $4 billion fine or or we think they've paid most of the $4 billion fine. and then in May of 2025, after you were on board at the SEC, an Abu Dhabi statebacked investment firm announced that they had just purchased $2 billion in World Liberty Financial
▶ 1:16:07from Trump's family. This is Eric and and Donald Jr. and Baron and Steve Whitov's son. So, so the president's company got a huge huge benefit, massive benefit by being in in that $2 billion transaction.
▶ 1:16:28They they bought Trump coin and they invested it in Binance, Chang Bang Jiao's company. So, so you're the cop on the beat. Explain to me how this happens without any enforcement action.
▶ 1:16:49Matter of fact, enforcement actions since Trump took office and you became SEC uh chair, they are now down enforcement actions are down 60%. your responsibility number one responsibility is to protect consumers and to maintain trust in our our securities industry.
▶ 1:17:20How does what you are doing protect the consumer? How how does letting these crooks letting them off, not prosecuting them, letting Trump's family do all this? Explain explain yourself. I I just it it boggles my mind that that this is going on and and there's no consequences to what the president's doing.
▶ 1:17:51Well, uh Mr. Congressman, I uh you know, I I can't speak to any one particular uh case. And so, uh
▶ 1:17:59you've got to be kidding me. I I give you that's a target-rich environment. Start anywhere you want. But but let's This is all public. So, you're not disclosing any any secrets here. We all know what's going on. The the the one question that's out there is why aren't you doing anything about it? Why are you letting him? Look, this is hurting the the crypto industry. all these scams. I mean, look at crypto today. I think it's down 25% in the last month. People are losing trust in that.
▶ 1:18:29This is not good for crypto. It's certainly not good for consumers. And it's awful the reputational damage that the SEC is suffering right now. Is is unbelievable. And you're in the seat, sir. It's your responsibility. I'm just asking for an explanation. Uh we have a very robust enforcement uh effort and we are bringing cases down six. Let me give you a list of the cases you've dropped.
▶ 1:18:56You you've dropped them against uh not only Binance but but Robin Hood. Uh there's a whole list of them here that uh there's like 10 major cases that you've dropped.
▶ 1:19:08Gentleman's time is expired.
▶ 1:19:10Answer that question.
▶ 1:19:12The gentleman's time is expired. Uh the gentleman from Georgia, Mr. Laddermilk, you're recognized the vice chairman of our House Subcommittee on Financial Institutions.
▶ 1:19:22Thank you, Mr. Chairman. Uh Chairman Atkins, thank you for being here with us. I've been looking forward to this uh testimony for for quite some time because uh uh I have for years been working on uh doing something about the consolidated audit trail and that's where my my questions are going to uh be uh around.
▶ 1:19:44Um, let me preface that with my concerns of the consolidated audit trail is first and foremost unconstitutional in the way that it's being operated, especially requiring the reporting of PII information. Um, at one point I I asked my local banker a question and I asked him I said, "What if the sheriff walks in and he asked you to provide him all of my financial transactions over a certain period?
▶ 1:20:14What would you do?" He said, "Well, I would ask to see a court issued search warrant before I gave it to him." So, I went to a local judge and I asked the judge, I said, "What if the sheriff came to you and he was asking for all of my financial records to be turned over, what what would your response to the the sheriff be before you issued a warrant?" He said, "I would need to to see cause, right?" Um, he would have to prove to me that there is justifiable cause
▶ 1:20:44for this. Um, my problem with the consolidated audit trail is it's forcing this information to be put into a centralized database without without cause, without reason. um your predecessor sat in that seat right there and I asked him what is the purpose of this consolidated audit trail that you are taking an individual who maybe buys a quarter share of Apple stock through Robin Hood or one of the other platforms and his entire information is having to be put in this database which
▶ 1:21:15beside the cyber security risk is unconstitutional. He said, "So we can p peruse the database looking for something that potentially is being done wrong." And I said, "Sir, that is exactly a definition of violation of fourth amendment of the constitution." So with that said, this is something I think that we must address.
▶ 1:21:37Um, and uh, chairman, you announced in September of last year, the SEC was undertaking a comprehensive review of the consolidated audit trail. Can you comment on that and and what you what you were finding?
▶ 1:21:51Yeah. Well, so that's active uh that's an active matter and we are you know definitely uh looking into that and working uh with uh various uh stakeholders in the industry to try to uh get this uh you know whole you situation under control.
▶ 1:22:09uh basically it suffered from a lack of uh let's say just a a good um view abinio when it was started 15 or 16 years ago whatever it was and so um and it's grown like topsy uh as far as um uh you know uh how much it's cost and and so we are out to get that under control make so that it is uh gathering uh information that's uh comports with the constitution Well, I
▶ 1:22:39appreciate you looking at it and uh I also appreciate under your leadership, the commission has uh sought to cut wasteful spending and the consolidated audit trails cost overruns have deeply concerned me and many of my colleagues in Congress. Uh what was originally supposed to cost 55 million has ballooned to nearly quarter of a billion in just eight years. Um the issue especially given that the consolidate up trails funding model was also found to be unlawful by the 11th Circuit Court of Appeals.
▶ 1:23:09Last week I joined Chairman Hill and subcommittee chair Wagner in a letter urging the commission to defer the approval of any new funding model until after the comprehensive review of the CAT is complete and I look forward to seeing those results. Uh Mr. Chairman, can you please explain how the SEC's comprehensive review of the CAT aims to help rightsize the cost?
▶ 1:23:29Well, we I called the heads of all the uh members of the um CAT uh committee basically that runs it to say that, you know, I'm not joking that we need to have this uh uh right-sized and with a goal of getting it under $und00 million um and then uh justify all the information that we're collecting. And so I've uh you know been working with uh people internally at the SEC and our enforcement staff, investigation staff as well.
▶ 1:23:58So uh you know there are some things that uh you know h have gone away as far as like blue sheets and whatnot information that comes that way. So we want to make sure that whatever is replacing blue sheets and cat is at what it is now uh makes sense and is efficient but then also uh comport with all of the uh points that you just
▶ 1:24:20Well thank you and I think the uh stopping the collecting of PII and deleting that that we have will be a priority and look forward to working. Gentleman's time is expired. Thank the gentleman. Chair recognizes the gentleman from Texas, Mr. Green, who is our ranking member of our oversight and investigation subcommittee. You're recognized for five minutes.
▶ 1:24:36Thank you, Mr. Chairman. Thank the ranking member as well. Also, thank Mr. Atkins for being here today. Uh, Mr. Atkins, sir, are you familiar with Trump Media and Technology Group?
▶ 1:24:51I've heard the name, but I don't
▶ 1:24:53You heard the name about it?
▶ 1:24:54Okay. It's It's a stock as it's on the stock market,
▶ 1:25:00I believe. So, yes.
▶ 1:25:01Yeah. And the the ticker symbol for it is DJT. Would Would you be surprised if it had a ticker symbol symbol of DJT?
▶ 1:25:12No. I mean, there are ticker ticker symbols on all sorts of things.
▶ 1:25:16Would would it surprise you if that's a
▶ 1:25:19Uh, not not necessarily. But
▶ 1:25:21so you you you don't know what the symbol is for it. Well, let me tell you, it's DJT. And are you familiar with what happened on April the 2nd, 2025 when the president announced his liberation day
▶ 1:25:42Uh, he made that announcement.
▶ 1:25:44Yeah. And do you remember what happened in the market? Would it surprise you to know that the market declined some 11 trillion dollars that day? uh the market was very volatile around that time.
▶ 1:25:5611 trillion dollars is is very volatile. And would you agree that later on the president paused that um that announcement that he made on Liberation Day? In fact, uh he did it some few days later. Do you do you recall that that he paused it? I I I don't recall all the
▶ 1:26:22You you are you now you're the you you are the head of some organization that has something to do with these kinds of things, aren't you, sir?
▶ 1:26:29Well, luckily we don't deal with tariffs. That's outside.
▶ 1:26:32I understand. But but you you're widely read, aren't you?
▶ 1:26:35I tried to keep up with things. I don't recall all the ins and outs of that.
▶ 1:26:40Okay. So if I told you that the market saw this this decline and that the president then um before the decline he uh posted on Truth Social. You do you know that the president is a owner of Truth Social? He has a large share of
▶ 1:27:00Yes, I I know he's involved with it.
▶ 1:27:02he does. Yes, sir. He does. And here's what he posted. This is a great time to buy DJT. You would you agree that the president's initials are DJT?
▶ 1:27:16Uh, yes.
▶ 1:27:17Okay, good. And so now we have DJT, the ticker symbol for his technology group that he owns a majority of the Shihir in also his initials. So he says it's a great time to buy DJT. Maybe what I'm doing now is informing you and perhaps you'll want to take some corrective action. But he says it's a great time to buy DJT. You you wouldn't be aware of this, I'm sure.
▶ 1:27:44Uh but DJT surged $415 million that day. Does that have you heard about that?
▶ 1:27:56I don't know all the specifics.
▶ 1:27:57Don't know all this. It's very complicated stuff, isn't it? kind of stuff that you, you know, person in your position wouldn't have heard of and do anything about.
▶ 1:28:08Uh there's a lot of activity in the
▶ 1:28:10Yes, sir. This is the president of the United States of America. All right. Now, that you know, uh president hustled $415 million for a business that he has a majority of the shares in. And uh he some people would call that market manipulation. But do you think that it merits some degree of investigation? Would you look into it?
▶ 1:28:38Well, you know, I
▶ 1:28:39if if what I've said is true, would you look into it?
▶ 1:28:42Uh the uh our our
▶ 1:28:44I'm a whistleblower.
▶ 1:28:47Uh well, I I So, we get lots of whistle.
▶ 1:28:50Well, I blow loudly. And we we
▶ 1:28:52I've just informed you on TV. The world's going to know that you now know that the president made $415 million on a stock that he advised people to buy just before he manipulated the market and caused this surge in the market. So now now you know, Mr. Chairman, we live in a world where it's not enough for things to be right. They must also look right. if for no other reason.
▶ 1:29:18The appearance of this the appearance of this is something that we ought to be concerned with. Now you're you're you're the chair. Would you look into it?
▶ 1:29:30You know, I again I can't confirm or deny anything as investigations,
▶ 1:29:36but I I would advise you to look into it. Thank you.
▶ 1:29:38Gentleman's time is expired. Members are reminded that pursuant to House Rule 17, they should avoid engaging in personalities when speaking about the president. It can always be about policy, but it cannot be personal. Chair recognizes the gentleman from Wisconsin, Mr. Style, who's the chair of the digital assets, financial technology, and AI subcommittee.
▶ 1:29:57Thank you very much, Chairman. Uh, Chairman Atkins, thanks for being here. Thanks for your service to the country. The United States has the greatest capital markets in the world. And in large part, it's uh the oversight and regulations that are provided to the SEC that make sure we guide that uh to uh to success. I want to touch base uh in particular on yourou with the CFTC.
▶ 1:30:19The house passed the clarity act uh to really provide a framework for regulation in the digital asset space uh to do two really important things in my view. uh one protect consumers uh and two make sure that the United States is the doicile to be able to out compete uh the rest of the globe. You engage inou with the CFTC. Sometimes we've seen the SEC and the CFTC not play well together. I think we're seeing a uh a change under your leadership at the the SEC.
▶ 1:30:46Could you provide a little additional uh clarity uh for a pun if you on the term clarity but a little more clarity on what thisou is, how it's working uh and how you're operating with the the CFTC in particular as it relates to the digital asset space.
▶ 1:31:02Well, thank you very much. That's uh really near and dear to my heart. So, I'm really thrilled that uh the president uh appointed Mike Celig to be chairman. So he came from my office and obviously was chief counsel or council for the uh um crypto task force. So he's well positioned to do what he's doing there at the CFTC.
▶ 1:31:23So our intent is to harmonize uh the uh activities of the two agencies particularly with respect to uh digital assets and that's why uh you know we're hoping for a good uh uh uh statute to be enacted uh you know from all the discussions here in Congress. As far as the actual working together of the agencies we are actively working on anou.
▶ 1:31:48kind of silly to think that two uh uh uh two groups that are serving the taxpayer have to have anou as between them to to work together. But be that as it may, we're we're out to get that.
▶ 1:32:00Well, I appreciate your leadership in this because making sure the CFTC and the SEC are working well together, not only at the the principal level at your level, uh but also through the staff is really important. Let's dive into an area of specific uh which is um token taxonomy. Uh we put forward frameworks on this uh in the house. Uh I know the SEC is engaged in this. There's obviously overlap with the CFTC. Could you provide clarity as to where uh you are uh on that work?
▶ 1:32:29Yes. So uh I've outlined uh how I believe that the two agencies will will uh march ahead to uh to bring clarity to this area. um it'll be constant with what's uh in the clarity act that you all passed here in the house and hopefully what will come out of the joint work that you're doing with the senate.
▶ 1:32:50So um you know we will carry that forward and basically it'll help uh give certainty as to where the jurisdiction of the two agencies are and if we marry that with super I like to talk about a super app where we'll have uh uh recognition of uh um substituted compliance between the two agencies. I think that'll be the best.
▶ 1:33:12Thank you. In my my final two minutes here, let me shift gears uh to um the proxy advisor duopoly. ISIS and Glass Lewis dominate uh in this space. I've introduced legislation uh to regulate uh and to change the rules of the road uh for proxy advisers. I am concerned about conflicts of interest um ideological bias, lack of transparency. Uh we have an opportunity to fix that from a legislative standpoint.
▶ 1:33:42I think that's really important. Uh while we're working through that process, what can you at the SEC be doing uh to address this concern? And do you share my concern uh on the risks posed to the capital markets uh by this duopoly?
▶ 1:33:57Oh, absolutely. And you know, anytime you have a concentrated uh industry, that's not necessarily good for the consumer of those products. But especially in this, as I alluded to um previously, uh the two the situation with those two uh firms is it's more of a symptom of the underlying problem, and that's again the weaponization of the uh of shareholder proposals and that sort of thing. So
▶ 1:34:23I agree I agree with you on on that. Uh, but I also think that there's a real conflict of interest between the ability to provide consulting services on one side of a so-called Chinese wall and then to be able um to provide advisory on the other side. Do you think that those dis those potential or real conflicts of interest should be disclosed for the capital markets to operate efficiently?
▶ 1:34:46Well, they not only should be disclosed, but obviously they need to be um addressed. And so I think that's uh that's an issue that we definitely are concerned about. I
▶ 1:34:54I agree. We appreciate your work in this area. Mr. Chairman, yield back.
▶ 1:34:58Gentleman yields back. Chair recognizes the gentleman from Missouri, Mr. Clever, who is the ranking member of our housing and insurance subcommittee.
▶ 1:35:04Thank you, Mr. Chairman. Uh, Mr. Atkins, thank you uh for being here today. Um, we on this committee often talk about investor confidence uh kind of like an an abstract concept.
▶ 1:35:20Uh uh but for millions of uh everyday Americans uh trying to buy a home uh it translates directly into whether they can get a mortgage at a reasonable rate.
▶ 1:35:39Um, I was on that second row down almost at the end in 2008 uh when uh your predecessor Chris Cox, uh, Hank Pollson, Ben Bernaki, um, Sheila Bear and came in uh, to tell us what was happening with the economy.
▶ 1:36:03It was one of the worst days in my life to to sit here and uh hear what was going on and not realizing that this committee had to had to address it. Um investors as you know lo lost trust markets collapsed uh and a lot of ordinary everyday Americans paid the price.
▶ 1:36:25Um uh and credit didn't just tighten uh like the uh chilly waters around Greenland, they froze. Um and Congress and regulators including the SEC uh worked uh to restore that that trust through a lot of measures including the skin in the game risk retention rules and uh disclosure requirements for uh assetbacked
▶ 1:36:56uh these uh rules were were put in place to prevent securitizing or securitizers uh from passing off lowquality assets to unsuspecting investors. Now, um you've recently indicated an interest in rolling back or revising some of these regulations.
▶ 1:37:19my my uncle, you don't know him, this right, uh, Uncle Leroy, my father's oldest brother, had a a company uh, and he did maintenance and he went to TA Luminos and Sign Company. He was working with the the CEO on on this contract. So, the CEO said, "Uh, now uh, if I give you this contract, will you be uh, honest?" And my uncle said, "I'll never forget it.
▶ 1:37:49Whether you give me this contract or not, I'm going to be honest." Um and so uh before making any revisions, will you commit publicly you will present to this committee uh those roll backs that you uh you've hinted that you wanted
▶ 1:38:19wanted to uh uh to do. Um, now I I I admit transparency uh makes us vulnerable, but transparency still should be done even if it's going to make us vulnerable. Will you commit uh to coming to this committee or informing this committee or discussing with this committee what your rollbacks will be?
▶ 1:38:44Well, I'm not sure that we'll have roll backs, but uh I mean as uh Mr. Sherman was talking about um the the whole one part of the market has really frozen up uh because of but if that's what you're talking about but uh anyway but Fanny May and Freddy Mack play an important role in the housing market but as we saw in the financial crisis uh you know they were a large reason for uh you know how that unfolded.
▶ 1:39:10So whatever we do, we have to be very careful uh you know with respect to um these markets but they are important uh you know in the whole uh economy of the United States. But happy to discuss uh that with you and your colleagues um you know as we go forth and and formulate our our proposals.
▶ 1:39:30Well, well, if we're going to, I may be semantics here, but if we're going to roll back if if you're going to roll back or make any dramatic changes, uh my question, my interest is the and transparency.
▶ 1:39:49Well, we we definitely we go through notice and comment. I take that very extremely seriously, unlike sometimes in the past. But we we want to have a good robust debate and and collect comments and so happy to talk with you all um about all of that and but whatever we do will be grounded uh as we talk to our
▶ 1:40:08Gentleman's time is expired.
▶ 1:40:10Thank you, Mr. Chairman.
▶ 1:40:12I thank the gentleman. Chair recognizes the gentleman from Kentucky, Mr. Bar, who chairs our financial institutions
▶ 1:40:18Thank you, Mr. Chairman. Uh Chairman Atkins, thanks for the great work you're doing at the commission. And as you know, for two consecutive Congresses, the House has passed and sent to the Senate Senate uh digital asset market structure legislation, most recently known as the Clarity Act, receiving overwhelming bipartisan support in this chamber last July. That level of bipartisan agreement reflects a growing interest in providing long-term certainty for market participants. From your perspective, Mr.
▶ 1:40:45Chairman, how does durable digital asset market structure legislation like the Clarity Act impact the United States ability to continue to lead in financial market innovation and protect investors?
▶ 1:40:58Yeah. Well, thank you very much. Well, as as you know, the president has set out the the challenge to that uh you the US should be the crypto capital of the world and I feel strongly that we can and should uh do that and um and and achieve it. So to do that we have to have a framework that makes sense that is fit for purpose.
▶ 1:41:19Unfortunately traditional uh uh rules that the SEC has you know are not really fit for purpose here and has created a lot of uncertainty in the marketplace. Thus the clarity act and thus the rule the true importance of the SEC uh to work very much handinand glove with the CFTC in order that there be no gaps uh in the oversight but that also innovators have uh shity as to what they're doing and they're not going to get
▶ 1:41:50you know in a gotcha sort of uh situation like has happened in the past with some of the enforcement actions that the SEC has brought in that area. So, we want to make sure that uh you know people know the rules of the road and can abide by it and that those will foster innovation here in the United States.
▶ 1:42:07I know I know there's a few outstanding uh issues and and points of disagreement in the Senate. We certainly encourage uh resolution of those points of disagreement to achieve what what you said is so important kind of a statutory framework for market structure so that indeed the United States can be the crypto uh capital of the world. Um Mr. Mr.
▶ 1:42:27Chairman, how do you ensure that SEC enforcement actions and investigations are conducted and completed in as timely and an expedited manner as possible and make sure that those investigations are driven by clear statutory and evidentiary standards and not by political, ideological or personal considerations? Uh and the context of that question is that the SEC in the past has encouraged applicants for registration with the SEC to reapply after uh after denials uh due to ongoing investigations.
▶ 1:42:58But if an investigation drags on and on and on, the applicant is effectively barred or precluded from
▶ 1:43:06Uh yes. No, that's a very important uh issue. And so I have a a good tough uh head of enforcement uh Judge Me Ryan. So she's uh a military court from the court of military appeals and so she has been looking at uh you know the the aging of let's say the inventory that we have and I did that as well.
▶ 1:43:27I started to when I first uh became a commissioner uh chairman and so we are we're focused on that's very important but reputational risk and all of that to people who are go through investigations you know is important plus the cost. So we take that very seriously in this commission.
▶ 1:43:45Well, thank you for your redoubling your efforts on that because um uh these enfor the enforcement functions, investigatory functions, very important uh functions of the of the commission in in terms of uh ensuring uh the public's confidence in our in our capital markets. Uh but but lingering investigations um don't facilitate the capital formation objectives as you know and I appreciate your attention to that. Um, since 2010, Mr.
▶ 1:44:12Chairman, the DoddFrank $150 million registration threshold for private fund advisor advisers has remained stagnant, lacking an inflation adjuster, and this forces many small innovative funds to divert capital from emerging companies toward costly compliance. These funds often play a critical role in providing capital to emerging companies in niche markets that larger, more heavily regulated funds might overlook.
▶ 1:44:35My bill, the Small Business Investor Capital Access Act, was included in the Invest Act, and that raises the registration threshold to $175 million, a very modest increase, uh, but also indexes it to inflation. This will ensure that truly small enterprises aren't crushed by unnecessarily federal mandates meant for larger firms.
▶ 1:44:54Chairman Atkins, do overly burdensome compliance requirements stifle the growth of smaller private funds and would adjusting the exemption threshold for small private fund advisors to accurately reflect changes in inflation help alleviate this
▶ 1:45:07Absolutely. And I salute you for doing that. I mean, all of these things add up and and it decreases competition and services to investors.
▶ 1:45:16Great. Thanks so much. I yield back.
▶ 1:45:20Gentleman yields back. Chair recognizes Mr. Dr. Foster of Illinois who's the ranking member of our financial institution subcommittee.
▶ 1:45:28Thank you Mr. Chair and our witness. Um I presume that you've been encouraged to use artificial intelligence and all of your workings from the White House. It was a general directive and you know obviously industry is moving very fast that way. Um now in in terms of the thousandpage prop that you have there you know how long do you think it would take AI to summarize that as in one paragraph you know one page 10 pages whatever level of detail you wanted you know maybe a few seconds I I don't know probably neither of us are an expert on that but I imagine it could be done
▶ 1:45:58in a few minutes and so that in terms of a burden on investors it seems like having a lot of information there is not a burden on investors in an AI world uh and and so I think That's an important thing that should go into your thinking as to what the appropriate level of disclosure. Materiality I believe is the best uh in the uh that the investor is the best judge of materiality.
▶ 1:46:22And if we air on the side of having a lot of you know probably you know 95% of what's in that stack of paper is is not material but there could be a footnote in there that is absolutely crucial. No human is likely to pick it up as you point out. no human's going to read that stack of paper, but an AI can and find that footnote. And so it seems like um you know the whole narrative of let's get to less disclosure is going in the wrong direction for an AI world.
▶ 1:46:48You know, I imagine that that stack of paper is probably 90% generated by AI or soon will be if it's not. Um, and so that that I think that it's a much better position if we have, you know, the AIS, you know, for IPOs and things like that generate a lot of information and then let the AIs of potential investors uh look at it um, you know, in great detail that that you'll end up with a more efficient market and less mistakes being made by investors due to lack of information.
▶ 1:47:17So, have you been thinking about that sort of thing when you you puzzled through the the whole what's the right level of information? Oh, absolutely. But uh but again, you know, there's when you think of the cost and the amount of uh the uh of work that goes into this sort of disclosure with the lawyers and everything else. Um you know, what sort of bang for the buck are we getting? But anyway, and lots of lawyers is going to get crushed too with AI.
▶ 1:47:45You know, I mean, most companies have everything electronically. they just turn their AI loose on that and generate, you know, it's it it's coming at us fast.
▶ 1:47:55Yeah. Well, it's so that that's a good
▶ 1:47:57Yeah. Anyway, so I I really encourage you to to think about that because I I think that's going to be a much a much safer market where there's a lot of information and that each investor or the investor's personal AI advisor will have access to that information but summarize it. You know, just in the case of climate, a lot of investors are going to think climate's material.
▶ 1:48:19Others will think it's immaterial and it's we're in a better position if it is the um the potential investor talking to their AI advisor saying, "I do or I don't care about climate and then getting a summary that reflects their preferences." It seems like that gets us to a better place than just these endless wars we have about, you know, what is and isn't material at the level of Congress. Um okay. Um let's see.
▶ 1:48:44One of the things I've also been worried about is the order orderly release of market moving information by federal officials. You know there and and agencies you know there have been some big mistakes. There was an uh issue where I think the BLS uh issued or leaked some information and you know like order of half an hour early to some lucky participants in the market.
▶ 1:49:06and and it seems like for a long time we've needed a more a more orderly way of of releasing that information that maybe you know could be governmentwide so that when you know whether it's Federal Reserve releasing information or the BLS or something that you had a standard electronic way of saying boom here the gate is now open and that information is there because there's a lot of things that can go wrong.
▶ 1:49:30Um is there any inter agency discussion of that trying to standardize mark the release of market moving information and maybe make it more
▶ 1:49:40No, that's that's an very important issue and uh and uh it's a little bit ad hoc now. I for example um the food and drug administration uh the director has come to talk to me about it and we you know so that that's a great example. You mentioned some of the other agencies and the fed and whatnot. So it's a very important issue and we have to you know each each uh agency needs to be very
▶ 1:50:05so if you need a nudge from this committee I think this is a very useful nudge that we could we could do that would actually you know make the markets work better and make us a better place to invest. A third area of concern that I don't have really a lot of time to go into is the use by federal officials of privatelyowned social media accounts uh to release market moving information like tariff policy things like that that move markets by trillions and effectively forcing every every time
▶ 1:50:34to buy that
▶ 1:50:35invite witness to provide his comments on that last question in writing. Chair recognizes the gentleoman from Missouri, the chair of our capital market subcommittee, Miss Wagner, for five
▶ 1:50:46I thank you, Mr. Chairman. Uh, Chairman Atkins, your recent speech at the New York Stock Exchange detailed the stark drop in public companies and the need to reform our regulations to promote capital formation. Soon after that speech, the House passed our bipartisan invest act to do just that. Now, the SEC is working to revitalize public markets by rights sizing disclosures and rethinking investment thresholds.
▶ 1:51:15How important is it for Congress to follow up on the commission's work with statutory changes? Well, I think uh absolutely uh your invest act and and all of the components of it I think are you know really s will be salutary to the markets and to you know to help uh rationalize some of the the practices there and our rules and so we welcome that and uh you know uh look forward to working with you on that
▶ 1:51:42and it's key to codify them while we had the opportunity here. Many of these bills we've worked on for 10 years and there have been rule letings by the SGC but we need to get them into statute. You would agree?
▶ 1:51:54I I agree to future proof uh that sort of principle.
▶ 1:51:59Thank you. Um you repeatedly mentioned chairs the importance of creating a disclosure regime that promotes rather than hinders companies going public. The invest act would streamline disclosure requirements as I said expanding access to capital for businesses throughout the entire country not just on the coast. In your opinion, how can Congress work with the commission to ensure these changes are most impactful?
▶ 1:52:26Well, so I uh invite your input and as we uh you know go about uh reviewing our rules uh this year and making you know issuing proposals for uh rule changes to modernize and rationalize these disclosure rules. You I'd be thrilled to have uh you know you and your colleagues
▶ 1:52:48Wonderful. Early in your tenure as chairman, you gave a speech directing SEC staff to remove the 15% limitation on closend funds investing in private funds. The next day, investment management staff removed the SBC's position for unlisted close-end funds.
▶ 1:53:07This was a welcome change for Americans across the country who will now be able to invest in companies that for far too long have been restricted solely to the wealthiest Americans. Uh through my increasing investor opportunities act, which was included in the invest act, we have also taken steps to codify this guidance and provide long-term certainty to close-end fund investors.
▶ 1:53:37to help provide clarity to investors. Could you please comment on whether in your view the removal of the 15% limit also applies to listed closend funds or whether additional commission action would be needed to remove the limit for closend funds?
▶ 1:53:59Well, so um yeah, I'd love to discuss that. So the the reason why we addressed this is because that limit was completely staff driven. It was not part of a rule or anything else. So um by changing that uh you know that helped uh you know the the filers to uh and the innovators to to uh make changes to how they're uh how they were going out to market.
▶ 1:54:26So, um, anyway, if there are, uh, uh, uh, holes in the, uh, edifice, so to speak, there, you know, we're happy to address all that and work with you on that.
▶ 1:54:36Great. Wonderful. We look forward to doing that. Um, so this is something that the SEC could take up under
▶ 1:54:43your leadership. Absolutely.
▶ 1:54:44And discuss more. Wonderful. Under current SEC rules, it is nearly impossible for large venture capital funds to invest in smaller regional funds. For example, if a large fund wanted to seed a smaller fund in St. Louis, that investment is capped at a tiny 20% non-qualifying basket. Um, as a result, access to venture capital remains highly concentrated on the coast, leaving out wide regions of the country, including Midwest. Ch.
▶ 1:55:13Atkins, do you agree that this 20% limitation hurts companies in places like Missouri? Uh I'm not I don't know I'm not familiar with the um actual uh impact on various regions but
▶ 1:55:29but the 20% cap.
▶ 1:55:32Yeah. So I think all of that needs to be revisited. These various caps are are kind of artificial and um uh you know I think it it all uh deserves review.
▶ 1:55:43Absolutely. Thank you so much. I have used my time and I yield back. Mr.
▶ 1:55:47gentleoman yields back. The chair recognizes the gentleman from Illinois, Mr. Casten, you're recognized for five minutes. [snorts]
▶ 1:55:52Thank you, Mr. Chair. Uh, thank you, Mr. Atkins, for being with us today. Um, I I I have some real concerns about the SEC um dropping their dismissing their lawsuit against Binance and staying whatever you're doing with Justin Sun and Tron. I understand from your exchange with the ranking member and with Mr.
▶ 1:56:13Lynch that you're not going to comment on ongoing investigations and I understand that but and and I also appreciate the chair's admonition not to engage in but I am extremely concerned with what the integrity of US capital markets and so you know I just want to review a fact pattern here. It is it is a fact that Donald Trump was convicted of 34 felonies for financial fraud.
▶ 1:56:39It is a fact that he and his children have said that in the wake of that fraud, they were, in their words, debanked and couldn't access conventional capital markets, and that that was why they turned to crypto. It is a fact that the UAE subsequently purchased World Liberty Finance tokens through Bitcoin, that that now contributes to substantially all of their wealth, and that substantially all of the Trump family's wealth is now in crypto.
▶ 1:57:03much of all of that has come since he became president uh January of last year. setting aside the emolements clause violations or implications there, if I am a foreign investor considering whether to invest in US capital markets, I would like to know whether the SEC is going to prioritize the interest of investors because these charges against I mean the charges against
▶ 1:57:33sunwash trading, moneyaundering, these are all deep structural problems in financial markets. when they look at the actions of your agency, they see multiple where you have not prioritized the interests of investors, but you have prioritize the interests of the Trump family. So my question is, can you point to an example under your leadership where you have put the interests of investors first and cost the Trump family money as a result? Just one example would be great.
▶ 1:58:02Well, I I as far as what the Trump family does or not, I I you know, I can't speak to that,
▶ 1:58:08but they've made billions of dollars. They pardon CZ for goodness sake after the case was dropped, after this money went through. This is most of their net worth. Why should people not believe that you will prioritize their interests of this singular billionaire over investor protection? Wash trades are a problem in the markets. Why aren't we prosecuting Justin's son right right now? And you can't answer that, but is there any example where you've put investors first over the Trump family?
▶ 1:58:37We So I I again, we put investors first every single day. Very robust enforcement that a division that is going after fraud in the market.
▶ 1:58:48If you can find an example, it would be great to share it offline and please publicize it because I care about markets. I want to shift. In November, the SEC announced you would no longer review or express views on companies no action requests. And I want to understand a little bit of what that means. I understand there's some discretion on your end, but have you are there any general rules or are we going to rely, you know, exclusively on shareholder litigation under 14 14A?
▶ 1:59:14If if a company if if if shareholders came forward and said, "I've got a proposal because I have concerns about potential conflicts of interest, appearance of constru of corruption, reputational issues associated with management's business dealings, and management says, I want to I want a no action review." Is that a categoric no, or you going to consider that on the
▶ 1:59:34Well, so the whole no action process with respect to shareholder proposals was an artifice by the commission that built up over the years. There's nothing in rule or in statute that requires it. We were shut down for 43 days nights.
▶ 1:59:50I'm asking I want to come this I want to come back because I'm trying to give you an example for my first question. World Liberty Financial is trying to do this shell with BitGo. That's a publicly traded company. People there might be legitimately concerned that there is fraud happening because all of these billions of dollars are coming into World Liberty Financial in ways that are direct violations of the emoleian If a shareholder in that entity said, "I would like to have a pro to have a vote on this." And management said, "No, we're going to push for a no action
▶ 2:00:22would you push back, or is that too dangerous because it would cause you to make Donald Trump angry?" Well, again, I can't speak to any particular issue um or or company, but uh as far as shareholders have their rights under state law, and if they want to uh uh vindicate those rights and and push them
▶ 2:00:43we're out of time, but Milton Friedman said shareholders are ultimately in charge, not management. I don't know why we're stepping on shareholder rights under your leadership. I yield back. I thank the gentleman for yielding and the gentleoman from California, Miss Kim, is now recognized for five minutes.
▶ 2:01:00Thank you, chairman, and thank you um Chairman Atkins for being here. For far too long, under Gary Gansler's runaway rogue regulation, the commission drifted away from its mandate of protecting investors and facilitating capital formation using regulation as enforcement. He single-handedly set back the crypto industry in this country by over a decade.
▶ 2:01:27And since taking office, President Trump and you have taken important steps to reverse that trend. Thank you for your work. In Congress, we have worked hard to assist those efforts with the passage of the Genius Act and now we must continue that work by getting the Clarity Act across the finish line.
▶ 2:01:48One way that the SEC has achieved that is through the crypto task force and its focus on unlocking tokenization to promote innovation and efficiencies in our capital markets. So, can you provide a brief update on the efforts to unlock tokenization and the benefits tokenization promises to bring to the US capital markets?
▶ 2:02:14Well, yes, I well, thank you very much. Tokenization I think is a very important uh innovation that's coming about and uh tokenized securities that can be uh traded uh onchain I think has a future uh benefit just for the transparency that distributed ledger technology brings to the issue and then the prospect for a t0 sort of uh payment versus delivery type of regime on change.
▶ 2:02:44So that can help derisk the financial services uh industry by a lot. So we want to encourage that and then have rules around this that um you know protect investors, protect issuers and and the other stakeholders in this whole
▶ 2:03:01Um I know that one avenue are exploring to unleash tokenization is the the potential innovation exemption. So, how is the commission approaching this innovation exemption and is there a timeline to issue that exemption?
▶ 2:03:17Well, we're uh planning to do that uh here this year and so um uh we we're hoping that uh you all will in Congress will uh you know adopt the Clarity Act or or whatever, however you do it, and then that uh um arrives on the president's desk. But in the meantime, we're working a pace and this innovation exemption I think will be a a good
▶ 2:03:43Sure. And uh one aspect of crypto task force has been collecting industry feedback around topics such as tokenization. So how does the commission plan to utilize the feedback that you collect on that issue from the crypto task force?
▶ 2:03:57Yes. So well we've done a number of roundts and and we've received a lot of uh commentary coming in from all sorts of stakeholders uh in and around the digital asset uh industry. So we are distilling that and uh using that to uh help uh you know refine our uh what we will come out with with respect to this innovation exception.
▶ 2:04:20Okay. you know outside of digital asset regulation another area that you have charted the SEC in a more positive direction is regards to form PF. So as you review form PF will the commission consider a new rule making to return form PF to its original FSOC focused
▶ 2:04:40Uh absolutely. It's a joint rule making with the CFTC and we have also been consulting with the Fed and Treasury um you know in this regard. Thank you. With the limited time that I have remaining, uh as you know, I've been working hard to provide regulatory relief uh to the office of the small business advocate by exempting it from the paperwork reduction act.
▶ 2:05:04So would you would reducing ownorous red tape like this provide the advocate with better information on the state of America and small businesses?
▶ 2:05:14I believe so. And that's obviously uh Congress has put that in statute as far as uh the office of small business advocates. So whatever may help uh the work of that office I think would be very helpful.
▶ 2:05:27Well, thank you very much. That's all I have for you today and thanks for being with us. I yield back.
▶ 2:05:32Thank you gentlemen Lady for yielding and the gentleoman from Massachusetts, Miss Presley, is now recognized for five Chair Atkins, I've read an article where you once said, uh, quote, "The ultimate boss is the investor," unquote. Uh, do you still stand by those words?
▶ 2:05:49Uh, as far as, uh, as far as the markets go, that's definitely true.
▶ 2:05:54Well, I think we can all agree if bosses are to make good decisions, they need to have access to good data. Unfortunately, as the head of SEC, you are denying investors access to information. and you're changing the rules that have been put in place by limiting what data is provided to investors and reducing how frequently data is provided to investors.
▶ 2:06:15Um, now I' I've had colleagues across the aisle complain about information overload and uh, you know, past bills colleagues so often investors have only have access to uh, quote unquote material information. The problem with that approach is that Republicans are arbitrarily choosing what information is material and immaterial to investors.
▶ 2:06:39Now, I've been on this committee eight years since I arrived in Congress, and I know that investors care about a wide range of information ranging from executive compensation to costy climate related disasters like floods and fires. So, I want to focus on diversity disclosure specifically. The SEC approved a rule that required public disclosure on the race and gender of board of directors.
▶ 2:07:04Now, this information was important to investors because study after study has confirmed that uh diversity is good for your bottom line. Uh it is good for business. So, can you explain why you believe investors shouldn't have access to this information?
▶ 2:07:22Uh well I I investors should have a access to material information and uh I mean in general it comes down to the company's uh decision as to you know what they believe is material or not. Um and then uh and because again it's for the uh reasonable investor. It's not for particular investors to uh you know as as the rubric that's the way the the court has ruled.
▶ 2:07:47So anyway, so our our uh uh rules are geared to to the company and it requires companies, issuers to disclose material information to the public. And so um you know
▶ 2:08:02well I'm running okay well I'll reclaim my time. I just um again in order to be a to make good decisions you have to have good data and the majority of investors are saying that they want this information and many reports and CEOs have affirmed that diversity is good for business and for the bottom line.
▶ 2:08:25So um that answer is insufficient for me and I just again a study of institutional investors that handle hundreds of billions of dollars have found that 30% of investors wanted to know if senior management was diverse. So that means roughly one out of three investors consider this information important. So I think that makes it material. Disclosures about board diversity, climate risk, use of AI are essential for investors to make smart decisions.
▶ 2:08:54After all, in your words, the investors are the ultimate boss. So to reiterate, bosses need data to make decisions. Now that's why I am reintroducing the Greater Supervision and Banking Act or GIB to mandate disclosures by the biggest banks, Bank of America, Wells Fargo, JP Morgan Chase, Goldman Sachs, and others. Investors and consumers alike deserve to know how these institutions are impacting climate change, how that's increasing cost and deadly natural disasters.
▶ 2:09:22Investors deserve to know whether these banks are rewarding themselves with large executive bonuses. And investors deserve to know that the board of directors at these companies represent them and their interests. They deserve it and they want to know. Chair Atkins, can you commit to finding a way to ensure this information is available to investors when when one out of three say this is what they want?
▶ 2:09:44Can I count on your partnership? Well, again, so uh the court has held that uh that uh information is material, not depending on, you know, what the proclivities of one or another and other
▶ 2:09:57I I got it. You're sticking to it. I was, you know, Chair Atkins, I'm trying to give you a win here. You don't you don't you don't have a stellar reputation on this front. You know, the 2008 Great Recession when you were first a commissioner at the SEC. Um but, you know, we could we don't have to go back decades. I mean, just a few years ago, you were advising FTX when that company collapsed. So I I really saw this as an opportunity for partnership for you to redeem yourself there, Mr. Chair. I was trying to give you a easy alioop.
▶ 2:10:23Um I do believe we need fair, orderly, and efficient markets and the American people deserve that instead of another global financial crisis. I yield back.
▶ 2:10:35I thank the gentle lady for yielding. The gentleman from South Carolina, Mr. Timmons, is now recognized for five
▶ 2:10:40Thank you, Mr. Chairman. Chairman Atkins, it is good to see you and thank you for appearing before the committee. I appreciate your engagement with Congress as we work to restore a regulatory framework that supports competitive capital markets and long-term economic growth. After several years of rapid expansion in the SEC rule book is encouraging to hear you mention that some regulations have become bloated and in certain cases obstacles to capital formation. You've indicated that the commission is now focused on reducing unnecessary compliance burdens while preserving strong investor protections.
▶ 2:11:11I agree with that goal and want to begin by discussing how the commission is addressing recent rulemakings that impose significant costs with limited benefits. One example is the 2023 fund names rule amendments which the SEC estimated would affect roughly 66% of funds and add substantial compliance and operational costs ultimately borne by American savers. So my question is this.
▶ 2:11:33Consistent with your goal of reducing unnecessary burdens, how is the commission or its staff reviewing or addressing these prior rulemaking excesses in what principles are guiding your approach to recalibrating rules that may got may have gone too far?
▶ 2:11:48Uh well, we're undertaking that uh in all of our divisions uh with respect to reviewing uh old rules and in particular the corporation finance division, you know, with respect to um uh regggsk uh which is kind of the bedrock of uh uh corporate disclosure, but you you've named others as well with respect to um mutual funds and whatnot. So all of those uh add costs to um uh to uh uh to investors.
▶ 2:12:18Um ultimately they bear the cost and so we have to have a uh it's good to have a retrospective view of that to weed out things that are not really fit for purpose.
▶ 2:12:28Thank you for that. Let me uh now turn to public company disclosure and capital formation. I understand that last year the commission received a proposal from US stock exchange requesting that the SEC initiate a rulemaking to allow for optional semiannual reporting for public companies. The goal was to reduce reporting burdens and short-term market pressure while fully preserving material disclosures for investors.
▶ 2:12:50This proposal closely mirrors what President Trump called for last fall as a part of a broader effort to spur initial public offering activity and encourage more companies to access our public markets. At a time when fewer firms are going public and staying public, it is worth examining whether our disclosure framework has become overly focused on short-term results at the expense of long-term growth.
▶ 2:13:12Uh can you share how the commission is thinking about potential changes to the public company reporting framework, including possible approaches to reducing short-term reporting burdens?
▶ 2:13:22Uh yes. Well, I've announced that we're looking at that. This debate has been uh uh going for now a few decades. uh the the requirements started out as uh annual reporting up until 1955 when it went to semiannual and then in 1970 went to quarterly and then the UK which kind of followed suit with us uh changed back to semiannual in 2014. So we're looking at all of this. I'm agnostic on this.
▶ 2:13:52We're we want to hear comments from people as to um uh you know what uh you what's the best may and it we were considering doing this for smaller companies where you know perhaps uh semiannual might be uh more uh appropriate for them but we're we're we'll we'll be seeking comment on all
▶ 2:14:13I think if the shareholders are in favor of it should be considered and maybe even create a larger burden maybe a twothirds burden to to achieve it but I think it's worth looking at. Thank you. Finally, I want to turn to venture capital and regional access to funding. When we talk about venture capital, it often seems like the conversation is limited to companies in New York, California, and Massachusetts. In fact, data from Carter shows that in 2024, California alone captured nearly half of all VC investment in the US.
▶ 2:14:40Meanwhile, entrepreneurs in my district and across the other 47 states continue to struggle to raise venture capital. So, do you agree that the lack of geographic diversity in VC funding is a problem? Uh well I know there is a a difference in in the distribution across the country. Um and what the causes are I'm not sure but uh
▶ 2:15:01well one way to address this challenge is through my bill HR 4431 which is part of the bipartisan invest act. The bill modernizes the definition of a qualifying VC fund under section 3C1 of the investment company act by increasing the beneficial owner limit from 250 uh to 500 and raising the capital cap from $10 million to $50 million. These targeted common sense updates would expand access to capital for startups outside traditional financial hubs while preserving strong investor protections.
▶ 2:15:32Uh thank you. I yield back.
▶ 2:15:36Thank the gentleman for yielding. The gentleman from New Jersey, Mr. Goheimer, is now recognized for 5 minutes.
▶ 2:15:40Thank you, Mr. Chairman, ranking member. Uh, chairman, thank you so much for being here. On August 2025, executive order uh aims to sorry, August 2025, executive order aims to increase access to, and I quote, competitive returns and asset diversification necessary for everyday Americans to secure a dignified, comfortable retirement. This order directs the Secretary of Labor to consult with the SEC to carry out its policy objectives.
▶ 2:16:07How's the SEC coordinated with the Department of Labor on this executive order so far?
▶ 2:16:12Uh well, we're actively working with them and uh the Department of Treasury uh on these issues and it's an important uh very important matter.
▶ 2:16:22Thank you. The order also directs the SEC to revise existing regulations and guidance relating to quote accredited investors and qualified purchaser status. you expect the SEC to pursue changes to these definitions?
▶ 2:16:35Uh we'll we'll certainly look at them uh and see whether they need uh adjusting given passage of time and and uh and there's a lot of obviously a lot of different ideas uh as far as you know what's an appropriate way to decide who's accredited and who's not. Thank you. Um, switching gears a little bit, there's been much discussion about the SEC's forthcoming digital asset innovation exemption.
▶ 2:17:01You've said that this exemption will quote allow registrants and non-registrants to quickly go to market with new business models and services that do not neatly fit within our existing rules and regulations. Just yesterday, the founder of the Safe Moon token was sentenced to eight years in prison for conspiracy to commit securities fraud. And new services like pump.fun fun make it very easy to launch tokens backed by absolute nothing. I believe we need clear guardrails and rules of the road for digital asset innovation to flourish in the United States, but we also have to have strong consumer protections.
▶ 2:17:31Can you discuss the timing and scope of the innovation exemption and how you're building consumer protections into it?
▶ 2:17:36Uh yes. Well, so fraud is fraud whether it happens, you know, the crypto world or in paper certificates. And so we take that very seriously and like you say that really is a detriment to um investor confidence if if we're not active uh in that area.
▶ 2:17:53So with respect to the innovation exemption, you know, it will be when we come out, the goal is to make it a cabin limited time type of uh exemption, but to allow innovators to uh operate in that uh uh in that within those limits uh and under supervision.
▶ 2:18:13But you're concerned like I am about these tokens backed by nothing like these these pumpf fun type things, right? I assume that's not what the SEC
▶ 2:18:21Absolutely. Okay. I think it's very important we keep an eye on that. Obviously, we want innovation, but we also don't want scam artists out there and huers pushing stuff online, and I think we have to be very careful about that. Um, the SEC has has rightly been spending a lot of time and attention on digital assets, but there are many other opportunities for updating and modernization. Electronic recordkeeping rules, e delivery, cross trading, form uh PF reporting for private funds, co-investment by open-end mutual funds, and many other areas are ripe in my opinion for modernization.
▶ 2:18:52Are these initiatives in your SEC still getting appropriate attention? How do you and your staff prioritize them and how you thinking about them?
▶ 2:18:59Uh well, we have a lot on our plate obviously, but uh you know, we're I I'm really uh very pleasantly surprised coming back to the SEC how gung-ho the staff is and all the divisions to dive into these. I think uh you we've restored confidence in the morale of the agency and and people are leaning into
▶ 2:19:18Yeah. And I think the modernization piece is key, right? there's a lot of opportunity uh to do it. Um I I appreciate that you've previously recognized that tokenized securities are and will continue to be securities. Would you agree that market making activity of tokenized securities should be treated in similar manner to traditional financial market making
▶ 2:19:38Yeah. Well, those are those big issues of uh you know how to adjust the rules to deal with a new reality. But uh but we definitely are looking in that uh to that in our trading and markets area and we've been having roundts uh you know in this regard and working obviously with the CFTC on it as well. Thank you. Digital asset market actors consistently tell us that regulatory fragmentation between the SEC and CFTC creates uncertainty, discourages responsible innovation and drives activity offshore.
▶ 2:20:07I appreciate the steps you've been taking in the CFTC to harmonize definitions and disclosure standards and supervisory expectations to reduce regulatory fragmentation. Can you discuss some of the challenges that market actors face navigating across conflicting regulatory frameworks?
▶ 2:20:21Yeah, well I I like to use an analogy of SEC CFTC two fortresses with a no man's land in between. So traditionally, you know, that field there, that no man's land is littered with the bodies of wouldbe products that could never really uh make it through that gauntlet. So we are, you know, out to change that and to uh work in harmony.
▶ 2:20:44Thank you so much. I yield back.
▶ 2:20:45Thank the gentleman for yielding. I now recognize myself for five minutes for questions. Chairman Atkins, thank you for being and thank you for your leadership at the SEC uh and an effort to resto restore the Securities and Exchange Commission to its statutory mission, protecting investors, maintaining fair and efficient markets, and facilitating capital formation in the United States.
▶ 2:21:07For too long, market participants, particularly in emerging and innovative sectors, have faced uncertainty driven by enforcement actions that have effectively substituted for policym uh and avoidance of rulemaking for areas where you could provide clarity. That approach undermined due process, chilled innovation uh and you know drove investors out of sectors uh that they were interested in because of the uncertainty around capital formation.
▶ 2:21:33Your public commitment to moving away from regulation by enforcement and toward transparent rules-based frameworks is a welcome shift. Thank you. Uh so we saw former chair Gensler seek to expand the SEC's jurisdiction over nonsecurity digital assets for years. Uh you know he would avoid answering really basic questions about whether something's a security or not. Um and tell everyone to come in. He would just never allow them to leave. In fact would engage in enforcement actions.
▶ 2:22:02So from your perspective, what should the distinction be between digital assets that tokenize real world assets and securities? So you could have a tokenized security, you could have a tokenized commodity, you could have tokenized real world assets. Do we get a bright line test adequate in the Clarity Act or how do you see that bright line if you're calling balls and strikes? What's your best way to describe it?
▶ 2:22:25Well, ultimately uh you know the the real answer is harmony between the CFTC and the SEC so that nobody is you know uh uncertain where to go. Um and that's been the problem now for a long time. But basically if we focus on tokenized securities as uh you know the the you know through investment contract and and uh that kind of uh analysis uh but then also concede that you know we have digital commodities, digital tools and
▶ 2:22:56um and and digital um and and other digital types of tokens that are clearly in the CFTC realm that will I think help bring clarity. So the clarity act uh you know takes great steps towards that and then the two agencies working in harmony can help.
▶ 2:23:14Yeah. And I thank you for creating a task force to focus on that as well. So even once we pass a law hopefully the Senate will pass something resembling what we've passed and get this across the finish line soon. There'll still be rulemaking. So thank you for kind of frontr running us in that sense to work towards having clarity there. And you've also previously stated, quote, "The right to have self-custody of one's private property is a core American value." So, I think self-custody is critical. You can't really have decentralized finance without the decentralized part.
▶ 2:23:44Right now, there are obviously intermediaries who serve a function in the market, but they also take a pretty big rake. So, a lot of the opportunity uh to make markets more efficient and to get more capital for the investors or those that are raising the capital comes from disrupting the intermediaries. Where do you think we can do that and still ensure that we provide investor protection?
▶ 2:24:06Uh well well those that's an important issue that uh you know we definitely are focusing on but uh as you say the right private wallets and and that sort of thing is very important and uh so we're going to make sure that that is recognized uh in the rules that uh we develop and so it already is you know to a large extent uh with respect to the legislation that's being
▶ 2:24:31I think that's one of the key things really that they're debating in the Senate on the clarity act is you know fundamentally western civilization depends on private property. Right now we've embraced this third party doctrine where there's an inter intermediary between you and your assets in every scenario whether it's a security bank deposit anything else uh and all this surveillance. I thought Hester Pur Commissioner Pur did a great job with a speech back in the summer uh that that she titled uh peanut butter and watermelon.
▶ 2:25:00And of course it be I encourage everyone who hasn't read it to read it. But um you know the point is is that a a party phone line where the operator had to connect two parties referenced oh I know your grandpa's the guy that used to put peanut butter on watermelon. Well that's an awkward thing. I just asked to be connected to my uh you know my grandpa. And uh so there's always this intermediary there and the technolog is there for us to do it. I think we can do it with good investor protections.
▶ 2:25:30I really hope the Senate works through the issues in uh the Clarity Act and uh we've continued to work with them. But I think the crux of it really comes down to self-custody because at the end of the day, if you always have to have an intermediary between your your assets uh and yourself, you don't really control your own private property. And that's a radical shift in Western civilization. I will have questions for the record. My time's expired and I yield. I now recognize the gentleoman from Texas, Miss Garcia, for five minutes.
▶ 2:25:58Thank you, Mr. Chairman, and uh um Mr. Atkins, I wanted to start by just reminding us that on December 11th, um the president uh said that affordability was a hoax, that it was made up by Democrats. And then recently in January, he says that Democrats don't talk about it anymore, that it's all solved. Do you think affordability is a hoax? Just yes or no.
▶ 2:26:27well, that's I'm trying to address affordability through the
▶ 2:26:31Sure. Just a yes or no. Is affordability a hoax?
▶ 2:26:34I I don't know if hooks or not, but it but it's something that we need to be
▶ 2:26:38Why is it so hard to say yes or no? You're you're the head of the SEC. You're a lawyer. You're well trained. You've dealt with these issues. You're talking about affordability. Do you talk about hoaxes all the time?
▶ 2:26:50Uh no. I mean I So I'm I'm focused on the reality of the situation.
▶ 2:26:54So is is it a hoax or not?
▶ 2:26:56I think I think that that affordability is an important issue that we need to
▶ 2:27:01So you refuse to answer. All right. Well, let's move on. It is the SEC cannon of ethics states that the SEC is an independent agency and in performing their duties members should exhibit a spirit of firm independence and reject any effort by representatives of the executive or legislative branches to affect their independent determination of any matter being considered by this commission. End quote. Yes or no? Again, yes or no.
▶ 2:27:30Do you agree that the SEC is an independent
▶ 2:27:35Yes, it's defined that way in the
▶ 2:27:37No, but do you believe I mean we can all read a statute. You're a lawyer. I'm a lawyer. But do you believe that it is an
▶ 2:27:45agency? That if Congress calls it that, then that's it. But u
▶ 2:27:50I'm asking you if you think it is, sir. Not what Congress thinks or not what what the statement says because obviously I read it,
▶ 2:27:58right? And well, as you read, you know that it's independence of mind, independence of thought.
▶ 2:28:03So again, you refuse to answer yes or no. Has the president, his family members of his cabinet or staff in the White House, have they ever asked or implied that you propose or implement a certain policy?
▶ 2:28:17Have they Could you repeat that again?
▶ 2:28:20Well, yes or no. Has the president, his family, members of his cabinet or staff in the White House ever asked or implied that you propose or implement a certain
▶ 2:28:33The president's issued executive orders. So I that could fall under what you just
▶ 2:28:40So is that a yes?
▶ 2:28:41He's issued executive order.
▶ 2:28:44So why do you refuse to just say a simple yes or no?
▶ 2:28:46It's not susceptible to a yes or no answer. Well, as a lawyer, I think I, you know, I'm offended that you wouldn't respond. Yes or no? Has the president, his family, members of his cabinet or staff in his White House ever asked that you take or decline any enforcement
▶ 2:29:03Uh, no.
▶ 2:29:04No. Great. We finally got an answer. How regularly do you consult with the president, his staff, his family, or members of his cabinet?
▶ 2:29:15Sorry, say that again. Well, let me try to be louder. How regularly do you consult with the president, his staff, his family or members of his cabinet?
▶ 2:29:25I talk to uh people at the White House and in the cabinet a lot. So, I I would say that's pretty regular.
▶ 2:29:32But do you consult with them on any of the operations or doings of the
▶ 2:29:37Uh no.
▶ 2:29:38No. Can you commit here today that for every decision you make as SEC chair, you ultimately will make that decision yourself free from outside pressures or influence from this administration?
▶ 2:29:50Oh, absolutely.
▶ 2:29:51Well, good. We finally got some answers. Now, let me ask you about the uh I want to follow up on Mr. Lynch's uh questions. Uh you've dismissed two, four, six about eight cases. Coinbase been been Binance, Gemini Trust, Ripple, Kraken, Consensess, American Crypto, Fed, Undue Finance. On what basis did you dismiss those
▶ 2:30:19Well, in general, it had to do with uh you know, questions about registration and uh that sort of thing. Uh that was left over from the last administration.
▶ 2:30:30I'm not understanding. What kind of registration do you think the prior administration filed frivolous lawsuits?
▶ 2:30:36Section five. So
▶ 2:30:38do you think the previous administration filed frivolous lawsuits?
▶ 2:30:41The SEC has a very mixed record on these and we are trying to clarify those rules
▶ 2:30:47did this protect investors in any way by dismissing these cases?
▶ 2:30:52Uh those cases all have flaws and we're
▶ 2:30:56Looks like you're not really wanting to give me any details. So we'll follow up in writing. What about the closed investigations? Robin Hood fuse crypto and deposit ladies time is expired. I would encourage you to submit the questions for
▶ 2:31:11I will and and I will recognize all from Tennessee to answer. Thank you, Mr.
▶ 2:31:17Mr. Rose is recognized.
▶ 2:31:20Thank you, Chairman Davidson, and thanks to Chairman Hill and Ranking Member Waters for holding this important hearing and thank you, Chairman Atkins for joining us today. My colleagues on the other side are citing press releases and enforcement actions brought by the former chair with large stated monetary penalties that the commission uh did not ever collect. Chairman Atkins, given that it's a new day at the SEC, what is your enforcement philosophy on returning the SEC to its core mission?
▶ 2:31:52Uh well, thank you uh Congressman. We are focused on uh on going back to basics and as you know is in our mission. So to build fair orderly and efficient markets and investor protection and capital formation those are the three pillars and so uh we are calibrating our enforcement uh efforts uh to that. So no more uh sort of gotcha types of things, no regulation through enforcement.
▶ 2:32:19we're focused on uh as we go about our rule making to have it through notice of comment rulemaking and regular order uh is to be returned and so with respect to enforcement I take very seriously that investor protection uh mandate that we have and to go combat fraud out there in the marketplace not chasing numbers and not uh chasing uh things that uh you know are not at that
▶ 2:32:47Thank you chairman. I I appreciate very much that kind of cleareyed view of what the purpose of the Securities and Exchange Commission is and thank you for your leadership in in redirecting and refocusing that back on the the purpose for your organization.
▶ 2:33:04Chairman Atkins, we've we've seen a troubling rise in so-called ramp and dump schemes, usually involving Chinese companies, which fraudsters gradually where where fraudsters gradually promote a stock and then rapidly sell off their holdings, leaving investors with significant losses. many of those victims, including hardworking Americans in including uh those I represent in Tennessee.
▶ 2:33:28Uh given that the SEC can only suspend trading in such securities for up to 10 days, what additional tools does the commission have to counter these manipulative schemes beyond that uh limited window? And could you also speak to the role the exchanges play in detecting and preventing this kind of fraud and whether there are steps Congress and policy makers here could take to better support the SEC's efforts to protect invest in investors here here at home?
▶ 2:33:57Yeah, thank you for that. But uh yes, Senator section 12 of the Securities Exchange Act, you know, our our our role is limited. Uh so we have the as you mentioned we can stop trading for up to 10 days and so we've done that in in 14 well 13 companies and the most recent one the 14th uh we stopped trading for it was on the New York Stock Exchange American Stock Exchange for one day and then the stock exchange took over from us after that to investigate that.
▶ 2:34:27So these particular schemes you know can really be very costly for investors. So, um, but beyond that, we can only delist a company if they haven't kept up with their registrations and up-to-date filings and that sort of thing. So, it really is incumbent incumbent on the exchanges, the SRO's to uh, police their markets. And so, we're working with them uh, to uh, you know, try to ensure that that happens.
▶ 2:34:56And and chairman, I congratulate you on the the great staff that you've been assembling and I know they serve you well. The the SEC's organizational chart shows a large number of offices and divisions, many of which have closely related functions as well as a significant number reporting directly to the chair. I doubt I suspect you're painfully aware of that.
▶ 2:35:17Is the commission considering ways to improve efficiency and coordination perhaps by better aligning related offices and streamlining the number of direct reports to the chair?
▶ 2:35:27Oh, absolutely. Yes, we're I'm I am very focused on that. I still remember uh when I worked for Arthur Levit back in the early 90s and he looked at the org chart and just was astounded at how many direct reports he had. He had more then than I do now probably. But anyway, uh so yes, it it was very much uh wanting uh to have a real refresh as to the organizational uh chart.
▶ 2:35:54I'm not sure we have time for this, but I'll try to get it in. And under former chair Gendler, the SEC embraced so-called stakeholder capitalism to the benefit of left-wing shareholder activists, but to the detriment of ordinary investors saving for retirement. I was glad to see the commission issue staff bulletton 14M last year to resend previous guidance that restricted companies abilities to exclude extraneous ESG related shareholder proposals. Uh can you please touch on that? And I guess you'll need to do that for the record as I am out of time. Thank you.
▶ 2:36:24I thank the gentleman for yielding and uh I now recognize the gentleman from New York, Mr. Torres, for five minutes.
▶ 2:36:30Uh thank you, Mr. Chair. Um Chair Atkin, you know, I've long been a believer in emerging technologies like crypto and blockchain, but as you know, every industry has actors good and bad. Crypto is no exception. So, have you taken any enforcement action against any bad actor in the crypto industry?
▶ 2:36:49Uh yes. Yes, I mean I we have brought uh cases for fraud, outright fraud, and uh we're in litigation uh with some of those right now
▶ 2:36:57involving digital assets.
▶ 2:36:59Involving digital assets. One actually up in your city or up in New York.
▶ 2:37:04Understood. Uh I want to make three observations about structural shifts in the stock market and then have you respond. First, the stock market is more passive than it has been historically. Since 2020, passive strategies have accounted for a majority of US equity assets under management. Second, the stock market is more concentrated than it has been historically.
▶ 2:37:25The top 10 account for 40% of the S&P 500's market cap, about a third of the S&P's 500's total earnings, and about a majority or near majority of the S&P 500's earnings growth. And finally, the stock market is less representative of the economy than it has been historically. The number of public companies, as you have noted, has fallen by around 50% since the 1990s.
▶ 2:37:48Many of America's most dynamic, highest growth companies have yet to go public, and many of them are content to remain private for longer stretches of time. So, the stock market is more passive, more concentrated, less representative than it has been historically. Since the stock market is structured differently than it has been, should we expect the stock market to perform differently than it has historically?
▶ 2:38:13Is the stock market of the 21st century qualitatively different from the stock market that has delivered an annualized return of 10% since 1959? What are the significance of these structural shifts and what does it mean for the performance of the market?
▶ 2:38:28Yeah, great question. So I don't pretend to have an answer but that's exactly why we need to make it more attractive or attractive again to be a public company so that we can have more of a diverse uh type of makeup there. And so uh in fact there's this uh great story about uh was told by the CEO of a very very large public pension fund where they got out of the private markets back in 20 after the financial crisis.
▶ 2:38:57They call it the dark years where they lost uh they went down from 90% coverage of of their anticipated benefits down into the 70s and they attribute that to not being involved in the private markets. So to have a well- diversified uh portfolio, you need to have exposure to private markets. If we can make IPOs great again, make public companies uh make up a much more diverse type of the marketplace, I think we can maybe solve that um part of the problem.
▶ 2:39:27And get back to your point.
▶ 2:39:28Um I'm cautiously optimistic about tokenization. I do believe tokenization has the potential to create a better, cheaper, and faster financial system. greater tradability, instantaneous settlement, greater liquidity, greater fractionalization of shares, and hopefully with it a greater democratization of finance. Just like digitization through the internet brought a wave of new customers, consumers to commerce, tokenization could bring a wave of new investors to the capital markets.
▶ 2:39:57Having said all that, an innovation like tokenization is not without risk. And so, how do we pursue an innovation that disrupts traditional securities without destabilizing a traditional securities regime that has served our nation reasonably well for more than 90 years?
▶ 2:40:14No, I agree with you very much. And so that's why we'll do this deliberatively. We will make sure that issuers um you know have insight into where their securities are and that uh that the tokenized securities are securities and will be treated uh as such and that we need to adjust where we have to the the rules but to ensure that there's transparency integrity to the markets and to make sure that the national market system is upheld.
▶ 2:40:44Do you have a timeline for the tokenization of securities or
▶ 2:40:47it'll be unfolding here over the next few years but uh the what we do now will be really uh seinal in in uh making sure that uh it's done you deliberatively and in good order
▶ 2:41:00and what are the implications of tokenized securities for corporate governance? It's been said that tokenized securities could mean the end of proxy voting. What what is your sense of the implications? I I think it might be even more it might be better for it frankly um because then you'll know where securities are and uh and who's you won't know voting necessarily but uh I think there'll be a lot more accountability and transparency.
▶ 2:41:27I see my time is about to expire. Thank
▶ 2:41:29I thank the gentleman for yielding and the gentleman from Indiana, Mr. Stsman's now recognized for five minutes.
▶ 2:41:35Thank you, Mr. Chairman, and thank you, Mr. Atkins, for for being here today. Uh just want to ask real quickly, one of my colleagues asked you earlier about form PF. Uh do you have an update on when any rule making might be finalized?
▶ 2:41:48Uh yes. Well, we of course extended the deadline uh for the compliance with the uh what action was taken uh a couple years ago, but uh we are working actively with the CFTC. It's a joint rule making and so we are that is a a current issue that we're addressing. Okay, great.
▶ 2:42:08Um, in August, President Trump signed an executive order to facilitate increased access to alternative investments for 401k investors, empowering American workers with greater choice in how to grow their retirement savings. Since then, the Department of Labor has submitted rulemaking to the Office of Management and Budget. Uh, the order also identifies a role for the SEC in advancing the president's objectives.
▶ 2:42:33How has the SEC coordinated with the Department of Labor to carry out his order and what factors have shaped your uh well we are actively uh collaborating with them and especially EPSA and uh we're also working with the department of the treasury on this and we've we've met uh you the staffs have uh been in active uh collaboration and also I've met with my with the secretary of labor and the deputy and also of course talked
▶ 2:43:03to the uh uh people at treasury as well including the secretary so um uh this is a an important issue and has to be done correctly and there need to be guard rails [snorts] around it. Uh because as a investor in the private markets over many years I you know know the good the bad and the ugly there and so we need to make sure that uh we are addressing this properly but as I just mentioned Mr.
▶ 2:43:30is there that uh you know there's uh you know one cannot necessarily have a balanced portfolio in this current market without having exposure to uh the private markets and in fact many uh ordinary uh employees um already do through their pension funds have uh exposure to the private market so why not extend it to 401ks
▶ 2:43:55so the executive orders also directs the SEC to consider parallel reforms to facilitate increased access to alternative investments, including revisions to existing guidance relating to accredited investor and qualified purchaser status. Do you expect the SEC to purch to pursue changes to those definitions?
▶ 2:44:14And are there any other potential changes or reforms that Congress should consider to enhance investor access to alternative Well, I've uh been in and out of the SEC now for about 36 years. And so, this issue comes it's like Groundhog Day over and over and over because it is a very uh it's a bit uh it just needs addressing and updating.
▶ 2:44:42uh but because the the lines that are being drawn, you know, why should a a professor of economics who makes $100,000 a year not be an accredited investor but somebody who just uh you know is a teenager or so who who's inherited some wealth and becomes an accredited investor. So that you know doesn't make a lot of sense on its face. So there, you know, we're exploring alternatives to, uh, you know, these the current situation.
▶ 2:45:12Great. Thank you. I know they called votes. I don't have any yes or no questions for you, unfortunately. Uh, so I'll yield back. Uh, thank the gentleman for yielding. Pursuant to the previous order, I declare the committee in recess subject to the call of the chairman. We will reconvene immediately following floor ver floor votes. Uh, Chairman Atkins does have a hard stop at 1:15, so we'll try to get back as quickly as possible to squeeze in as me as many member questions as possible. So the committee stands in recess.
▶ 3:18:46The committee will now come to order. I will recognize myself for five First of all, Chairman Atkins, thank you for being here. I'd like to start by talking a little about the accredited investor definition. Currently, becoming an accredited investor is subject to requirements that revolve around income and wealth. I personally find this phenomenon to be a little puzzling because wealth is not necessarily an appropriate measure of financial sophistication.
▶ 3:19:15We currently have a narrow merit-based pathway to become an accredited investor for investment professionals like those holding a series 7 or series 65. But I think there's a larger question at play here and is it fair to gatekeep investment opportunity based on financial wealth or based on uh knowledge and merit? Chairman Atkins, do you believe that wealth is a poor proxy for financial
▶ 3:19:40Uh, yes. I know a lot of dumb rich people. [laughter]
▶ 3:19:44My legislation, the Equal Opportunity for All Investors Act, uh, which is also a provision within the Invest Act, creates a new pathway to become an accredited investor through an examination created by the SEC and administered by FINRA. This will certainly open the door uh further for knowledgeable people to get access to sophisticated investments and if understood properly can open the door for them to earn higher returns. Next, I'd like to discuss an issue that I've heard has become a significant problem from businesses in my district in Nebraska.
▶ 3:20:14In recent years, there has been a growing and troubling trend of sophisticated third-party litigation financeers, many operating from foreign jurisdictions backing predatory plaintiffs lawyers to bring baseless claims against US public companies. I've heard about this issue from trucking companies in my district and from insurers, but I think there's uh interesting tie to our capital markets as well.
▶ 3:20:39These foreign investors are participating in our capital markets and may have access to non-public case-pecific information about the litigation they fund. A bipartisan House Select Committee on the CCP report warned that foreign actors could use litigation financing to gain access to sensitive IP and other commercially viable information.
▶ 3:20:59It follows that litigation funding also presents the potential for market abuse if litigation related financial interests are used to inform hedging, short positions, or other trading strategies tied to the outcomes of material legal proceedings? Mr. Chairman, from an investor protection and market integrity standpoint, does the commission have specific concerns about potential intersections between litigation, finance, and trading activity?
▶ 3:21:26Well, just speaking, you know, personally, I I I do have uh, you know, troubles with that and I I know there are ethical issues as well that have presented themselves over time. So, uh, you know, whether or not that falls within our bailick or not, I think it's but it it bears some uh, you know, attention.
▶ 3:21:48Has the uh has the SEC under your leadership considered uh maybe you know uh the ramifications of these third party suits? Is this a conversation that's happening uh at the
▶ 3:22:01Well, uh I'm happy to uh begin it. I haven't uh you know I have uh I think that's like I said I think it's an issue worth addressing. And just to give some context here, you know, we are in Nebraska the home to some very large trucking companies and tort reform is dearly needed in the American Southeast.
▶ 3:22:20But when you've got a foreign growth fund funding a plaintiff's lawyer to go after uh a trucking company and get a billion dollars for a fatality, which is terrible, should always be prevented. it is really making uh it hard to do business in America and move the things the truckers move. So, I appreciate that. Uh I think there are a couple of potential bad outcomes here from a national security perspective and I wanted to use my opportunity today to put this on the radar.
▶ 3:22:50Um number one, as the select committee on the CCP report indicates, it's possible that foreign entities could gain access to US intellectual property as part of a civil suit. Number two, it's also possible for any foreign entity to use our legal system to try and delay the release of a new product or service in order to give a foreign competitor more time to get their products out there. So, uh, with that, I yield back and I recognize the gentleman from California, Mr. Licardo, who is now recognized for five minutes.
▶ 3:23:19Chairman, thank you for your testimony uh today and thank you to the chair. I um I [clears throat] represent a good part of Silicon Valley and I know you're very familiar with the importance of capital markets there both public and private and certainly there are great concerns and I appreciate you are addressing some of those concerns about the challenges uh particularly for early stage companies to be able to um go public
▶ 3:23:50and certainly I've been working um with colleagues on the other side of the aisle as well and for example extending the ramp for emerging growth companies. Um, and I appreciate there are other things you've mentioned in your testimony, particularly about tying materiality uh more tightly to disclosures and other things that might reduce some of the burdens going public.
▶ 3:24:09I wanted to shift though to the other part of that um that the phenomenon that we're seeing which is this massive shift at least in the percentage of total investment from public markets to private markets.
▶ 3:24:22uh and the massive growth we've seen in private equity in particular and now increasingly um exposing retail investors uh to private equity and secondary markets and I know there are many folks in Silicon Valley um who themselves are quite sophisticated they might be you know at Kleiner Perkins for example but are very concerned about the um and frankly uh investor protection as we're starting to widen
▶ 3:24:53access uh to private equity. Is there anything that the SEC is considering or might uh to improve transparency and protect investors who are increasingly getting into those secondary markets?
▶ 3:25:09Well, well, thank you. what's a very important issue and I take it very seriously that uh you know as we deliberate over you know how to um allow you know more more access to the private markets which have their own kind of special um uh you know qualities and whatnot that are hugely different than the public markets.
▶ 3:25:34you know, we need to do this uh deliberatively with good guard rails and so we the Department of Labor and Treasury are very much uh focused on uh you know that aspect of investor protection. But uh as I uh mentioned earlier in the uh hearing here that um you know it is because of the way the public markets have developed and how we have half the number of public companies as we had 30 years ago.
▶ 3:26:01we are now the United States is uh you know fully 50% of the world's uh capitalization equity capitalization so everything is spread among fewer companies obviously but we have really strong robust private markets as well but there are a lot of you know buyer beware issues there in the private markets where uh you know that that we need to make sure that we're not just uh you know opening up uh you know retail investors to something that
▶ 3:26:32they're not uh necessarily ready for or aware of all the pitfalls. So, a lot has to rest on the trustees and and the other uh you know people who are managing 401k funds. So, we have to really make sure that they are aware and that that that we set up parameters around which uh you know they may um you know put their uh beneficiaries money into uh markets that are not public.
▶ 3:27:00Appreciate that. As as we're thinking about that significant shift from public to private, um should we be concerning Congress? Should we be are the particular actions we should be taking um to try to redirect that percentage in some way to encourage more of those capital dollars in the more transparent public markets?
▶ 3:27:23Well, I don't know. I mean, I I leave that to you, but Orisa is a very strong tool actually. And so that's why the department of labor is central to this and I know they take that very seriously and the standards under which trustees you know are bound. And so I think that's uh you know that itself is a good uh tool that uh that we have to uh to try to then uh you know put in the proper guard rails.
▶ 3:27:49Thank you. I yield.
▶ 3:27:51Gentleman yields back. The gentleman from Pennsylvania, Mr. Muer who is also the chair of the subcommittee on oversight and investigations is now recognized for 5 minutes.
▶ 3:28:00Thank you chairman. Good afternoon chairman. Nice to have you with us. So I'd like to focus on capital formation. How the SEC can ensure our public markets remain the strongest in the world for companies looking to raise capital. The invest act I think as you know is a strong step in that direction. reducing such barriers for small issuers, strengthening private markets, and expanding capital formation opportunities.
▶ 3:28:24Under your leadership, working alongside the President Trump's progrowth agenda, IPO activity rose nearly 50%, increasing from 154 offerings in 2024 to 226 in 2025. So, that's of course very very positive development. On January 28th, I'd like to ask you this question. We sent a a letter requesting any recovered deleted text messages from the former chair Gensler.
▶ 3:28:51Uh this request stemmed in part from Chair Gensler's well-known lack of cooperation with uh this committee. Uh these texts are of significant interest to our oversight work uh to fully uncover what was deleted. Can you comment on the current effort? Uh well, we are uh actively looking to see what we can do to uh reconstruct uh you know the the missing data because obviously there statutes and other things that require us to keep that.
▶ 3:29:20So uh we're working on that and um I can keep you
▶ 3:29:24Thank you. I appreciate that.
▶ 3:29:26Uh as you well know the consolidated audit trail or CAT is the massive trade tracking database the SEC mandated exchanges and broker dealers to to build. Uh, many Republicans have serious concerns about the scope of data collection and the privacy risks posed by such a large centralized system that collects investor data.
▶ 3:29:45Does the SEC believe it has or should seek authority to reimburse the industry mandated to fund the CAT or eliminate the system We're uh actively working with uh you know the members of the uh CAT uh committee and to uh try to rightsize it and then we have a lot of issues that need to be addressed and uh so we will be uh we're actively working on this and ultimately uh you
▶ 3:30:15know will be talking perhaps to the appropriators uh about some of these issues.
▶ 3:30:20Okay. Thank you. Uh, and I uh I appreciate your response to my letter on the 2023 money market fund rule. You noted the staff is working with industry, particularly on liquidity fees and institutional prime prime funds. Based on what you've seen so far, do you believe those concerns warrant reopening, rewriting, or eliminating portions of the 2023 rule? Uh, well, all these things are are open.
▶ 3:30:46the markets changed a lot and uh you know I have my concerns about some of those uh some of the aspects of of that rule uh you know with respect to um to the markets and and the funds. So yes, we're looking at all of these issues. Appreciate that as well.
▶ 3:31:03Crowdfunding is a critical way for early stage businesses as you will know to raise capital from the neighbors, friends, families. Unfortunately, small issuers are hit with ownorous financial disclosure requirements as soon as they raise over a h 100,000. Do you agree we need to remove crowdfunding barriers for small issuers?
▶ 3:31:23Great. Um and I'm glad you agree because my legislation, the access act, does exactly this which was included in the invest act. So that's good to hear. Um you've stated before that you want to make IPOs great again. Um exchanges I meet with say this year minus a disruption during the government shutdown has been terrific for IPOs. Um how have you achieved how have you achieved the success?
▶ 3:31:54Well, I think part of it is just to change the tone uh frankly and to tell people that, you know, we are uh out to try to make it uh attractive uh again to be public and that we're serious about it. And so the three pillars that I mentioned earlier about uh you know trying to rightsize and modernize rationalize the disclosure framework.
▶ 3:32:16Second is to focus on litigation reform that through the the few ways that uh you know I have in my toolbox to do that and then third is to focus on weaponization of the corporate government's um uh apparatus and so through those um you know this might be at the margins but I think just that tone uh you know has been able to uh you know attract people and increase interest and uh so we will continue that and as
▶ 3:32:46we put points on the board as we come out with proposed rules and then ultimately finalize them, I think that'll help uh help do it as well.
▶ 3:32:55And if there's anything within that or in anything that you're working on that you recommend us to codify, we would very much appreciate your your guidance and suggestions. Thank you, chairman. I yield back, Mr. Chairman.
▶ 3:33:07Gentleman yields back. The gentleoman from Michigan, Miss Talib, is now recognized for five minutes.
▶ 3:33:12Thank you so much, uh, Mr. Chair. Chairman um Atkins, is it a coincidence that only weeks after Trump familyowned World Liberty Financial launched its stable coin that SEC's division of corporate corporation finance that oversees released a statement declaring that stable coins are not securities.
▶ 3:33:38Uh I don't think one has to do with anything with the other but uh the stable coin aspect is came from the um ultimately from the uh the Genius Act obviously which took stable coins out of
▶ 3:33:52so no coincidence. Let me tell you why my residents think it wasn't a coincidence. Uh during the 2024 election cycle nearly half Mr. chair of corporate spending came from cryptocurren uh crypto industry. Did you know that
▶ 3:34:12half of corporate spending came?
▶ 3:34:13It says nearly corporate nearly half of corporate spending came from industry the crypto industry into the 2024 election cycle. Did you know that?
▶ 3:34:23I've not.
▶ 3:34:24No. Yeah, I can I can share with your team the the the report on that. So crypto intervened in dozens of elections across our nation, spending more than banks and oil companies. Experts have called it quote one of the most aggressive corporate spending sprees in modern political history. Fast forward to today, Mr.
▶ 3:34:45chair in the in in the SEC has dismissed right fast forward dismissed or state enforcement actions against major cryptoreated donors or supporters of President Trump such as Coinbase, Kraken, Binance, Justin Sun. The commission has seen a significant reductions in staffing of course, right? With perhaps one in five staffers leaving.
▶ 3:35:11Whistleblower awards are down dramatically and policies are issued without allowing public comment. Do you see what I'm saying here? And the SEC SEC has basically stopped its enforcement efforts in favor of regulation by the CFTC which has far fewer resources and staff. So my residents are asking, is this a coincidence? I don't think so. And I said, Mr.
▶ 3:35:37Chairman, you know, out of all due respect, I I hope you understand the incredible importance of your position because it looks to me like cryptocurrency is getting a tremendous return in its political investments. I can't fault anyone who thinks your agencies bought and paid for, especially my constituents and residents that watch again how the current administration is, you know, violating Molly's clause and so much more in regards to running the business out of the Oval Office.
▶ 3:36:03But other things are and I don't know you you answer this question you know folks are listening. So is it a coincidence that the Trump that Trump pardoned the founder of Binance who was convicted of money laundering and now Binance holds roughly 85 87% of all Trump stable coins in circulation worth $4.7 billion. Are you aware?
▶ 3:36:26Well, madam, we follow the law as far as the actions of the genius and we take our duties seriously and uh on enforcement investigations and rule
▶ 3:36:36So, but why why but Mr. Chairman, why why after Justin Sun invested 75 million in Trump's World Liberty Financial did SEC drop its civil fraud case against Well, I can't address any particular uh uh uh
▶ 3:36:57you just dropped not enough evidence. Uh
▶ 3:37:00I can't address any particular matter, but especially ones that are still under uh consideration.
▶ 3:37:05No, you dropped these. It's done. You said there's no fraud completely. So anyway, that's good news.
▶ 3:37:11We dropped the registration issue, which I think is a red herring from the previous um administration.
▶ 3:37:18Okay. So, another one, months after the firm tied to the Emirati royal family purchased 49% stake in World Liberty Financial, and just for fees to understand, Trump's World Liberty Financial worth half a billion dollars. The Trump admin then allowed the UAE to purchase 35,000 highly valued I AI chips. Did you know that one?
▶ 3:37:40Again, I can't speak to any
▶ 3:37:42Oh, it just smells funny. Is that Is that People still say that, right? No, I don't know. It just looks very and it doesn't give us a lot of faith that you guys are not being influenced by the Trump administration's world liberty financial investments. It just Mr. Chair is chairman I I understand but all these dropping of cases and everything just poof out of out of the window.
▶ 3:38:11It doesn't look right. Well, the m
▶ 3:38:16gentle lady's time is expired. I'd like to thank Chairman Atkins for his testimony today. Without objection, all members will have five legislative days to submit additional written questions for the witness to the chair. Uh the questions will be forwarded to the witness for his response. Chairman Atkins, please respond no later than March 18th, 2026. This hearing is