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Gensler's tenure marked by ambitious reforms, legal

challenges

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SEC's crypto crackdown led to criticism, legal battles

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Trump likely to appoint a Republican SEC commissioner as

acting

head

By Douglas Gillison

WASHINGTON, Nov 21 (Reuters) - U.S. Securities and

Exchange Commission Chair Gary Gensler will step down on Jan. 20

when President-elect Donald Trump's administration takes over,

the agency said on Thursday, ending an ambitious tenure that saw

him clash with Wall Street and the crypto industry.

"I thank President Biden for entrusting me with this incredible

responsibility. The SEC has met our mission and enforced the law

without fear or favor," Gensler, who was nominated by Democratic

President Joe Biden in 2021, said in a statement.

Known for his hard-charging style, Gensler led an ambitious

agenda to boost transparency, reduce systemic risks, and stamp

out conflicts of interest on Wall Street, completing dozens of

new rules, some of which have been challenged in court.

Among his major accomplishments were changes to increase the

resilience and efficiency of U.S. markets, including speeding up

trade settlements and overhauling the $28 trillion Treasuries

market, as well as a number of rules boosting investor

disclosures and corporate governance.

The Baltimore native also successfully implemented rules

mandated by Congress imposing SEC oversight on auditors of

U.S.-listed Chinese companies, ending a decade-long tussle with

Beijing that lawmakers said had put U.S. investors at risk.

On the enforcement front, Gensler's SEC broke new ground with a

multi-year effort focused on Wall Street's use of text, WhatsApp

and other unauthorized channels to discuss business, levying

more than $2 billion in fines against dozens of firms, including

JP Morgan and Goldman Sachs ( GS ).

He also took on the crypto industry, suing Coinbase,

Kraken, Binance and others, alleging that their failure to

register with the agency violated SEC rules, accusations the

companies deny and are fighting in court. When it comes to

crypto, the courts have mostly backed Gensler's positions.

But his sweeping agenda and uncompromising posture sparked

intense pushback from Wall Street, as well as congressional

Republicans, and even some Democrats.

The U.S. Chamber of Commerce, Managed Funds Association and

other groups sued in the conservative-leaning Fifth U.S. Circuit

Court of Appeals and elsewhere to overturn at least eight rules,

arguing they were unjustified, harmful or beyond the SEC's

authority.

Jill Fisch, a University of Pennsylvania law professor

specializing in securities regulation, said Gensler would depart

with a mixed legacy.

"I think there are clearly some victories, but I would say

he came in with a fairly aggressive rule-making agenda and most

of that either hasn't or isn't likely to endure."

TRUMP TRANSITION

In a major blow to the agency, the Fifth Circuit ruled in June

that the SEC did not have the authority to oversee the $27

trillion private funds industry. That loss, and other legal

challenges, have slowed the agency's rule-making this year, and

could impede the agency in the long run, Reuters reported.

Just before Gensler's announcement on Thursday, a federal

judge in Texas struck down

the SEC's

overhaul of Treasury dealer rules

adopted earlier this year.

Some critics also say Gensler's crypto crusade was

ill-conceived and damaged the U.S. economy by stifling

innovation and pushing crypto companies offshore, criticism he

has rejected. In a speech this month, he argued history has

shown that "robust securities regulation both creates trust in

markets and fosters innovation."

Trump has not said who would replace Gensler, although he

is widely expected to appoint one of the current Republican SEC

commissioners, Hester Peirce or Mark Uyeda, as acting head of

the agency.

Reuters

previously reported

that Trump's transition team is considering former SEC

officials for the job permanently.

Gensler's successor is expected to

immediately end the crypto crackdown

, review many of Gensler's rules, pull enforcement actions

wending their way through the courts, and pursue rule changes

focusing on promoting capital formation.

(Writing by Michelle Price; Additional reporting by Chris

Prentice in New York; Editing by Paul Simao)