House Financial Services Committee Says SEC Politicized Rulemaking During Gensler’s Tenure
February 11, 2026 – The house financial services committee says the SEC politicized rulemaking during Gary Gensler’s tenure, putting average investors in the back burner.
Current SEC Chair Paul Atkins testified before the committee today, February 11, 2026.
The speaker notes that under the Biden administration, the SEC allegedly “strayed from this mission” by focusing on politicized rulemakings and “regulation by enforcement” rather than transparent rulemaking, leading to political and social objectives in securities regulation at the expense of American investors and small businesses.
As a result, the public market has actually shrunk.
In fact, it’s shrunk 10% since 2021.
“Leading entrepreneurs found their capital for growth in private markets delaying opportunities for America’s individual investors, small institutions, our unions, our 401k plans, to have more investment choices.
And that cutting-edge innovation was driven offshore by often regulatory uncertainty,” the Committee said.
Gensler’s Favoritism of Wall Street Over Main Street
During Gary Gensler’s tenure, transparency rules were delayed throughout his time as SEC Chair.
At the time, SEC Commissioner Caroline A. Crenshaw expressed serious concerns over the agency’s decision to scale back the Consolidated Audit Trail (CAT) system, a vital tool designed to enhance market transparency and protect retail investors.
It was established during the “Flash Crash” of 2010, highlighting gaps in market oversight through sophisticated data collection.
The goal of the CAT was simple.
To provide regulators with timely data on trading activities across various markets, enabling them to detect fraud, manipulation, and other forms of wrongdoing.
However, a decision by the SEC was made just one month after Gensler left to reduce data collection.
SEC Commissioner Crenshaw emphasized that reducing the data collected by the CAT effectively “wipes away the fingerprints from the scene of the crime.”
By removing this vital information, the SEC made it more difficult to identify fraudulent activities, including market manipulation.
President Donald Trump made a bold statement during the Bitcoin Conference in 2024, stating he will fire Gary Gensler upon taking office.
Gensler announced his resignation would be January 20, 2025, following intense backlash and pressure from investors and the new administration alike.
Prio to resignation, several petitions flooded social media calling for the firing of Gary Gensler, with the hashtag #FireGaryGensler trending on X throughout his tenure.
What frustrated investors the most is every time hedge funds requested delays to transparency rules, the SEC would budge, allowing bad actors to continue operating in the shadows.
In 2024, Billionaire Mark Cuban, one of many SEC critics, said, “I wouldn’t trust them to do the right thing ever”.
During a Reddit AMA, the Shark Tank celebrity said the SEC is a mess and that it only protects Wall Street giants.
“It’s an agency created by and for lawyers to win cases rather than to act in the interest of investors.”
American Investors Praise Foreign Regulators
Over the course of Gensler’s tenure, retail investors have praised foreign regulators, particularly in South Korea where short selling violations are enforced with more than just a “pay-to-play” fine.
Asia has stepped up its game when it comes to the violation of their market integrity.
In South Korea fines are in the billions and life-sentencing is a possibility.
Financial authorities revealed in May 2024 that over 200 billion won in illegal short selling had been identified involving nine global investment banks.
President Yoon Suk-yeol stated: “We will address the imbalance between individual and institutional investors, significantly enhancing penalties against illegal short selling and unfair trading.”
Will SEC Chair Paul Atkins Repeat Gensler’s Tenure?
The question now is whether SEC Chair Paul Atkins will repeat Gensler’s tenure or create leveled playfield for both institutional and individual investors.
A topic that has been troubling retail investors post the AMC and GameStop shake of 2021 is the MMTLP scandal, where FINRA issued a rare U3 halt trapping investors’ money before delisting the ticker.
Released email transcripts between the SEC and FINRA show both regulatory bodies were aware of a fraud that was happening behind closed doors.
“Looks like this MMAT/MMTLP matter has now hit my Fraud team’s radar screen (and seemingly a lot of other radar screens as well). I know you have spoken to Patti Casimates and our General Council’s office — but was wondering if it made sense for my Fraud team to have a conversation directly with you and your folks working on the matter so we are not duplicating efforts.
We are looking at the two issuers from a fraud/manipulation angle and, in fact, bluesheeting both MMAT and MMTLP as we speak,” said FINRA’s Sam Draddy to the SEC on December 5th, 2022 — just days prior the U3 halt and delisting of MMTLP.
To this date, no trading records, blue sheets, or other material has been provided to the public.
And what’s to be done about the massive off-exchange trading in stocks such as AMC, GameStop, and many others?
While the world of retail investors has shed more light on market injustices than ever before, there is still much work to be done.
During the House Financial Services Committee meeting, Atkins was commended for working to reverse prior rulemakings that hindered capital formation, but is it enough?
When touching on market manipulation, “pump and dump” schemes seem to be the main topic here, not dark pools, not spoofing, not overleveraged positions, not FTDs, and not conflicts of interest.
Curious to hear what you think. Leave your thoughts below.
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Will we see any changes in the market with SEC Chair Paul Atkins? Or will it be all lip service like former SEC Chair Gary Gensler?