There is a pattern to Paul Atkins’ public appearances that is impossible to ignore. Every speech, every conference address, every prepared remark seems to be yet another carefully worded announcement of what the SEC is no longer going to do. Not a vision. Not a mission. A retreat — masquerading as philosophy.
His latest speech, delivered at a Texas Stock Exchange conference in Miami — sharing a stage with Governors Abbott and DeSantis and Citadel Securities President Jim Esposito — was no exception. This time, Atkins declared that the SEC should defer to the states on matters of corporate governance. “We must stay in our lane as a disclosure agency and not be a merit regulator,” he said. He called it a return to “first principles.” He framed it as competition and federalism at their finest.
It sounded reasonable. It wasn’t.
Let me explain why deferring to the states on securities enforcement isn’t a principled act of federalism. It is, in plain terms, an abdication of the SEC’s investor protection mission — and a particularly reckless one.
The head of the US Securities and Exchange Commission has said federal regulators should take a back seat to states in policing executive conduct, underscoring the administration’s stance that light-touch regulation will unleash economic growth.
The comments by SEC chair Paul Atkins are the latest indication that federal authorities wish to retreat from aggressive legal and regulatory enforcement, which they have maintained is not ultimately useful to investors.
Politically conservative states, most notably Texas, have been setting themselves up as business-friendly alternatives to traditional corporate and financial powerhouses such as Delaware and New York.
“[We] are focused on ensuring that states, and not the SEC, regulate matters of corporate governance,” Atkins told a conference on Monday in Miami organised by the Texas Stock Exchange, which is set to launch this year, in comments posted on the SEC’s website.
“Over time, the agency has used its disclosure authority to attempt to indirectly establish governance standards that state corporate law should and can address. We must stay in our lane as a disclosure agency and not be a merit regulator,” he added.
Source: SEC chair says US states should lead on policing corporate behaviour
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“In reality, ‘tone-at-the-top’ is not really just ‘tone-at-the top’ it is a lot more.”