President Biden has picked Allison Herren Lee, a member of the Securities and Exchange Commission, as the acting chair of the SEC, as nominee Gary Gensler waits in the wings as a more permanent chair once he is confirmed by the Senate.
Lee was sworn in as an SEC commissioner on July 8, 2019 after she was unanimously confirmed by the Senate. She has written, lectured and taught classes about financial regulation and corporate law. Lee and a fellow commissioner, Caroline Crenshaw, have also sometimes objected to moves by former SEC chairman Jay Clayton and other SEC commissioners to
The SEC is going through a period of transition with the new Biden administration coming in this week. It has nominated Gensler, a former chairman of the Commodity Futures Trading Commission, as the next chairman of the SEC, but the Senate has been late in convening hearings of most of Biden’s Cabinet nominees after the protracted battle over the transition from the Trump administration and the attack on the Capitol two weeks ago by rioters.
This week, the Senate began holding hearings on some of the more important Cabinet posts, including Treasury Secretary nominee Janet Yellen, Secretary of State nominee Antony Blinken and Defense Secretary nominee Lloyd Austin. It’s unclear when a hearing will take place for Gensler, especially with a possible impeachment trial looming for former President Trump, and the need to take up some of the urgent legislative proposals from Biden’s team related to COVID-19 and economic relief.
It’s not unusual for a new SEC commissioner to be named from among the existing commissioners, who have already been confirmed, to fill the chairman role on a temporary basis for months at a time. After former SEC chair Mary Schapiro departed in December 2012 at the end of President Obama’s first term, her role was filled by fellow commissioner Elisse Walter for nearly four months until Mary Jo White was confirmed in April 2013. When White left in January 2017 at the beginning of the Trump administration, the chairman role was filled by commissioner Michael Piwowar until Clayton was confirmed in May 2017. A number of SEC officials have been departing in recent weeks, including chief accountant Sagar Teotia (
Gensler is expected to bring a tougher stance on financial regulation than Clayton, whose views fit in more with the deregulatory bent of other Trump administration officials. Gensler acquired a reputation for being a strict industry watchdog over the banking industry despite his background as an ex-partner at Goldman Sachs.
Lee, in contrast, has brought more of a legal background to the SEC, and she expressed an interest in focusing on climate and sustainability reporting as acting chair, which would fit in well with Biden administration priorities. She was on the staff of the SEC for more than 10 years in different roles, including as counsel to commissioner Kara Stein and as senior counsel in the Division of Enforcement’s Complex Financial Instruments Unit. She is a former special assistant U.S. attorney, was a member of the American Bar Association’s former Committee on Public Company Disclosure, and participated in a USAID project in Armenia, helping draft reporting and disclosure provisions for a comprehensive law of the Republic of Armenia on Securities Market Regulation. Before joining the government, Lee was a partner at Sherman & Howard LLC, a Denver law firm that specializes in securities, antitrust, and commercial litigation.
“It’s an honor to continue my service on the Commission in this new role,” Lee said in a statement Thursday. “I have tremendous respect for my colleagues on the Commission and the exceptional staff across the agency, and look forward to working closely with them. Together we will continue the agency’s work of protecting investors and ensuring market integrity. During my time as commissioner, I have focused on climate and sustainability, and those issues will continue to be a priority for me.”
The Biden administration plans to focus on combating climate change and may want to roll back some of the recent SEC regulations that discouraged companies from providing climate risk disclosures. Accountants have increasingly begun weighing in on sustainability reporting and assurance services. Standard-setters like the Sustainability Accounting Standards Board, the International Integrated Reporting Council, the Climate Disclosure Standards Board, the Global Reporting Initiative and the Carbon Disclosure Project announced plans last year to align their standards more closely to meet the increasing demands of investors for ESG reporting. Two former SEC chairs, Schapiro and Walter, also were interested in sustainability issues and joined the oversight board of SASB shortly after it was founded.
