You are here: Home » Finance » News » Banks
Business Standard

US President Joe Biden's SEC nominee vows review of GameStop trading issues

As many as 98.78 per cent votes were cast in favour of the resolution to authorise the bank to raise capital through issuance of equity shares or other securities, Yes Bank said in a regulatory filing

Joe Biden | SEC | US stock markets

Reuters  |  WASHINGTON 


By Pete Schroeder and Chris Prentice

WASHINGTON (Reuters) - U.S. President Joe Biden's nominee to head a key market regulator promised on Tuesday a thorough review of issues raised by the GameStop Corp stock frenzy, including whether customers were best served by some retail trading practices.

Gary Gensler, the president's nominee to lead the Securities and Exchange Commission, said he would look into whether customers get the best prices when brokers are paid for their order flow and business practices that incentivize trading.

"Technologies change and markets change, but we should always evaluate new approaches to markets," Gensler said during a confirmation hearing before the Senate Banking Committee.

Shares of video-game retailer GameStop soared to dizzying heights in late January as retail traders on social media site Reddit championed the stock in the face of heavy bets by short sellers - who profit when shares fall.

GameStop shares plummeted about a week later, leaving some who had bought the stock at lofty levels with heavy losses and prompting calls for regulators to take action to protect investors.

Wall Street is keeping a watchful eye on the Biden administration's moves in the regulatory arena after a relatively easy four years under former President Donald Trump.

Progressives see the and the Consumer Financial Protection Bureau as key to advancing policy priorities on climate change and social justice and expect Gensler and Rohit Chopra, who Biden nominated to lead the CFPB, to take a tough line on Wall Street and repeal Trump's regulatory changes.

Republicans have criticized Biden for bowing to leftists and have warned that Gensler and Chopra, both experienced corporate regulators, will be divisive if confirmed to the positions.

"These are both going to be key officials setting financial policy for Team Biden. For Gensler, the focus will be on investor protection and how the should respond to GameStop-related market volatility. For Chopra, it will be about his vision for the agency and his enforcement priorities," said Jaret Seiberg, an analyst at Cowen Washington Research Group.

As head of the Commodity Futures Trading Commission, Gensler implemented new swaps trading rules created by Congress in 2010 in response to the global financial crisis, developing a reputation as a tough operator willing to stand up to powerful Wall Street interests.

Democrats also pushed Gensler on Tuesday to commit to new corporate disclosures on climate change risks and political spending, which he said he would study if confirmed. He similarly vowed to look into cryptocurrency, which he said can be a "catalyst for change" but pose investor protection concerns.


Currently a commissioner at the Federal Trade Commission, where he campaigned for tougher consumer privacy and enforcement penalties, Chopra helped establish the CFPB, which was formally launched in 2011.

Democrats pushed Chopra to revive the agency after the Trump administration weakened enforcement and several rules, while Republicans warned the CFPB overstepped its authority previously under Democratic control.

Chopra said one area he would like to focus on if confirmed would be on the entry of large technology companies into financial services, and what it could mean for consumers' privacy.

Progressives also may push Chopra to revisit payday lending and debt-collection rules that they say won't protect Americans. Gensler may be pressed on reviewing rules governing investment advisers and shareholder voting rights.


(Writing by Michelle Price; additional reporting by Katanga Johnson; Editing by Paul Simao)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, March 02 2021. 23:39 IST