Retail investors are firing back at the new SEC Chair, Paul Atkins, for failing to address the actual problems market participants are facing.
Retail investors are voicing growing frustration with the U.S. Securities and Exchange Commission (SEC) and its new Chairman, Paul Atkins, following his remarks at the SEC Speaks event on May 19, 2025.
Atkins’ speech, detailed in a press release on the SEC’s website, emphasized a pro-innovation stance but has drawn sharp criticism for sidestepping what many retail investors see as their most pressing concerns—particularly regarding the controversial Consolidated Audit Trail (CAT) system.
This backlash comes on the heels of an X post from the SEC’s official account (@SECGov) on the same day, which kicked off a thread highlighting Atkins’ focus on innovation over enforcement.
Atkins’ Speech: Innovation Over Investor Protection?
In his address, Chairman Atkins outlined a vision for an SEC that “embraces and champions” innovation, particularly in areas like cryptocurrency and private fund investments.
He announced plans to revisit restrictive rules on closed-end funds, potentially opening up the $31 trillion private fund market to more investors, and to integrate the SEC’s FinHub into broader agency operations to foster a culture of innovation.
However, his comments on the CAT system—a market-wide audit trail designed to monitor trading activity—have sparked outrage among retail investors who feel their core issues are being ignored.
Atkins acknowledged the CAT’s ballooning costs, now nearing $250 million annually, and the risks associated with storing vast amounts of sensitive data.
He directed SEC staff to conduct a comprehensive review of the system, focusing on its costs, reporting requirements, and scope of data collection.
While this move might seem like a step toward reform, many retail investors argue that it fails to address the fundamental problems with the CAT system: its inefficacy in protecting retail investors from market manipulation and its burden on the very investors it’s meant to serve.
A community note attached to one of the SEC’s follow-up posts highlights the CAT’s role in uncovering market abuse, suggesting that even a fraction of the fines from enforcement actions could fund its operations.
However, retail investors are quick to point out that these enforcement actions often result in disproportionately low penalties for institutional players like hedge funds, leaving retail investors to bear the brunt of the system’s costs through higher fees passed down by brokers.
Retail Investors: “We’re Being Ignored—Again”
Retail investors, already disillusioned by years of neglect from the SEC, are firing back at Atkins for what they see as a continuation of policies that favor Wall Street over Main Street.
On platforms like X, investors have expressed their frustration, arguing that the CAT system, while touted as a tool to monitor market activity, has done little to protect them from predatory practices like naked short selling, payment for order flow, and dark pool trading—issues that disproportionately harm retail traders.
One X user commented, “Atkins talks about innovation, but where’s the innovation in protecting retail investors?
The CAT system is a bloated mess that tracks our every move while hedge funds keep manipulating the market unchecked.
This isn’t what we need from the SEC.”
Another added, “The SEC under Atkins is just more of the same—catering to institutions while retail gets squeezed.
We’re watching you, Paul Atkins.”
These sentiments echo a broader dissatisfaction with the SEC’s historical approach to retail investor protection, a frustration that reached its peak under Atkins’ predecessor, Gary Gensler.
Gary Gensler’s Legacy: A “Disgrace” to Retail Investors
Gary Gensler, who served as SEC Chairman until January 2025, is widely regarded by retail investors as a failure when it came to safeguarding their interests.
Critics argue that Gensler’s tenure was marked by a focus on protecting hedge funds and other institutional players at the expense of retail investors.
Despite his public statements on investor protection—such as his 2022 remarks at the SEC Investor Advocacy Clinic Summit, where he emphasized fair access to financial markets—many retail investors feel that his actions fell severely short.
Under Gensler, the SEC ramped up enforcement actions, but retail investors point out that these efforts often targeted smaller players while letting major hedge funds off with minimal penalties.
For example, cases of market manipulation uncovered by the CAT system rarely resulted in fines substantial enough to deter future misconduct, as noted in the community note on the SEC’s X thread.
Moreover, Gensler’s reluctance to address controversial practices like payment for order flow, which critics argue disadvantages retail traders by prioritizing institutional profits, further eroded trust in the SEC.
“Gary Gensler was a disgrace to the SEC and retail investors,” said an X user.
“He talked a big game about protecting us, but all he did was protect the hedge funds and institutions.
The CAT system became a tool to spy on retail traders while letting the big players run wild.
We had hoped Atkins would be different, but so far, it’s more of the same.”
Atkins Under Scrutiny: Retail Investors Demand Action
With Atkins now at the helm, retail investors are watching closely to see if he will break from the SEC’s past and address their concerns.
While his push for innovation and his directive to review the CAT system have been noted, many investors fear that these efforts will once again prioritize institutional interests over their own.
The CAT system, in particular, remains a lightning rod for criticism.
Initially implemented to enhance regulators’ ability to monitor trading activity and detect illegal practices like insider trading and market manipulation, the system has been plagued by cost overruns and concerns about data security.
Retail investors argue that its benefits have been overstated, pointing to the lack of meaningful enforcement against institutional players as evidence of its failure.
“The CAT system is a perfect example of how the SEC has lost its way,” said another retail investor activist.
“It’s supposed to protect us, but instead, it’s just another burden on retail investors while the hedge funds keep gaming the system.
Atkins needs to do more than just ‘review’ it—he needs to fix it.”
Looking Ahead: A Call for Real Change
As Paul Atkins begins his tenure as SEC Chairman, retail investors are making it clear that they will not settle for empty promises.
They are demanding concrete action to address the systemic issues that have long disadvantaged them in the financial markets, from reforming the CAT system to cracking down on market manipulation by institutional players.
Atkins’ early focus on innovation and his willingness to revisit outdated rules, such as those governing private fund investments, may signal a shift in the SEC’s priorities.
However, for retail investors, the true test will be whether he can deliver on his promise to promote innovation without sacrificing investor protection—a balance that his predecessor, Gary Gensler, failed to achieve.
For now, retail investors remain skeptical but vigilant, ready to hold Atkins accountable for his actions.
As one X user put it, “We’re not here for more speeches about innovation.
We want results.
Atkins, you’re on notice—retail investors are watching, and we won’t be ignored.”
But I’m curious to know what you think — leave your thoughts below or start a discussion in the Retail Investor Forum.
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