Former SEC chair warns Gensler's policies are headed towards 'dangerous trajectory'
GOP lawmakers tell FOX Business they plan for 'all-out assault' against SEC if party retakes Congress
Former Securities and Exchange Commission Chairman Harvey Pitt argues courts are likely to undo what the SEC is proposing.
After Republican lawmakers signaled U.S. Securities and Exchange Commission Chairman Gary Gensler’s policies are exceeding his authority, one former SEC chair expressed the same concern about unconstitutional rules and policies.
"I think there's a serious disconnect between some of the things that are now taking place at the commission and what the authority of the agency is," Harvey Pitt told FOX Business’ Maria Bartiromo Friday. "The agency has a very broad mandate, but it doesn't have a mandate, for example, to compel companies to report certain carbon green gas emissions levels. And yet the SEC is attempting to do that."
On "Mornings with Maria," Pitt voiced concerns that Gensler’s latest policy push could discredit the agency.
"The courts are likely to undo much of what the SEC is proposing to do," the former chairman explained. "And when that happens, the agency can lose its credibility."
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Gensler is facing scrutiny from Republicans on the Senate Banking Committee for including newly proposed rules that force progressive edicts on the environment and other social issues near and dear to Democrats, as well as expansive crypto regulation. Republicans also told FOX Business they plan to oust Gensler and his leadership if they gain control of Congress in the midterms.
The U.S. Securities and Exchange Commission Chairman Gary Gensler's policies are headed towards a "dangerous trajectory," former SEC Chairman Harvey Pitt said on "Mornings with Maria" Friday, July 22, 2022. (Getty Images)
Pitt called Gensler’s policies "very murky," and noted uncertainty has risen among business owners and CEOs.
"While these cases go to court, businesses will pay a heavy price," Pitt said. "It's not just the price of regulation, it's the price of uncertainty that is hurting all of these businesses. And that's not a good way for American capital markets to function."
The former SEC chair also pointed to a specific rule proposal that would require companies to disclose climate change risks from partners, customers and clients.
"There's an enormous cost associated with all of this, and companies are going to have a difficult time gathering the kinds of information that the SEC seems to require," Pitt said. "It's saying even information that isn't material has to be disclosed. That is really a very dangerous trajectory for the SEC to be taking and one that causes great concern to people like me who believe in the agency and believe in its mandate."
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Former Securities and Exchange Commission Chairman Harvey Pitt reacts to Gary Gensler’s GOP backlash and impending deal with China.
Pitt argued businesses will be "lost at sea" if the SEC puts forward rules which are not "very clear" and "tailored to deal with financial materiality."
"They're going to be at a loss to know exactly what to do," the former chair cautioned. "And what's worse is once these rules are adopted, there will be a heavy enforcement component to follow up on the rules. And that is something that will add to their costs."
FOX Business’ Eleanor Terrett and Charlie Gasparino contributed to this report.