Can You Trust the SEC?

Mike Lee Says “NO”

Utah’s favorite senator is pushing for significant changes to the agency responsible for overseeing and regulating the nation’s stock exchanges

The Securities and Exchange Commission (SEC) is meant to regulate the stock market. As is the case with every form of government in the history of the species, the SEC has been infected.

Mike Lee passionately states the so-called “independent commission” we call the SEC cannot be trusted.

Why Mike Lee is Targeting the SEC

If you’ve suspected the SEC is failing as a regulator and overseer, you are not alone. The stock market has become a massive casino, equating to a roll of the dice instead of a means of traditional investing. Mike Lee is going out of his way to call out the SEC for failing to properly regulate the industry.

Lee highlights how the SEC has been humiliated in federal court several times in recent years. The SEC has flouted the law over and over again, losing its legitimacy with each successive setback.

The Utah Senator is adamant that the SEC cannot be trusted as a law enforcement body. The hope is that Lee’s input will shape the new Trump administration’s reshaping of the federal agency.

In addition to Lee and Musk, DOGE specialist Vivek Ramaswamy also chimed in to lambaste the SEC after its diversity requirements were deemed illegal. Though the SEC probably won’t be eliminated altogether, its role has the potential to be redefined.

Lee and Musk are Teaming Up to Reform the SEC

Though meaningful SEC reform is not on the horizon, the agency is now under the microscope. The SEC has unfairly targeted Elon Musk for buying Twitter stock before acquiring the company.

As Musk recently tweeted, the SEC is a weaponized institution engaging in the dirty work of politicians. The SEC appears to be in bed with anti-business Democrats intent on stifling regulation.

Lee and Musk also highlight how the SEC acted illegally when approving NASDAQ policy that requires corporate boards to add diversity quotas based on identity. Those quotas consider race, sex, gender identity, and sexual orientation. The SEC mandates that corporate boards provide a written report detailing why they did not meet DEI quotas.

In short, the SEC is guilty of engaging in identity politics. Such identity politics should not have a role to play in decisions made by corporations.

Lee and Trump are Poised to Change the SEC

If Lee’s words are indicative of the tone to be set in the future, the Trump administration will make significant changes. The Trump cabinet might make a massive overhaul of the federal agency. Though the SEC might have been worthy of a modicum of trust in preceding decades, that rapport has dissipated.

Look for Lee, Trump, and DOGE to slash spending for regulation including the SEC. Moreover, the DOGE advisory panel might consult with Lee to identify securities regulations to be cut. Though Lee’s SEC scrutiny might not be enough to get the agency off Musk’s tail, it is still important.

Ideally, the tandem of Lee and Trump will redefine the SEC, ensuring it has the tools necessary to identify insider trading and other manipulation. The agency will likely still exist after the second Trump administration yet it might be transformed for efficiency.

The Focus is now on the new SEC Head Paul Atkins

The SEC’s role and future handling of subsequent legal challenges now falls on Paul Atkins. Atkins is Trump’s selection to lead the agency. Atkins, the former commissioner of the SEC, also served as a Wall Street adviser.

Atkins appears to be on the side of Lee and fellow Republicans with a pro-business agenda. Lee’s input will likely steer Atkins toward walking back lawsuits and rules pursued by the previous agency head, Gary Gensler.

Gensler is widely regarded as a disappointment. The former SEC head went to great lengths to add safeguards providing investor protection. Gensler also pushed for heightened market integrity.

Gensler’s changes failed to provide transparent guidelines for regulation. Moreover, Gensler’s changes thwarted potential innovation. Lee wants to change that to spur economic growth and innovation.

Stay tuned. The evolution of the SEC is a work in progress that might take a surprising turn for the better in the months ahead.