Trump’s Two New Nominees For Sec Commissioner: Elad Roisman and Allison Herren Lee, What to Expect?

The Securities and Exchanges Commission (Sec) is in a crossroads of sorts. Vast changes since the digitization of our economy have been ongoing for now two decades, but Sec has failed to adapt and to respond to a changing world.

Congress recently asked them to undertake numerous studies following revelations that Initial Public Offerings (IPOs) are at new lows, as are new business start-ups.

The somewhat incredible events of yesterday where Elon Musk revealed plans to take Tesla private might increase charges that the current securities laws simply do not work.

In an age of algorithms and fast innovation where globalization is the norm, one can not simply reveal much of the information the lengthy disclosure rules require. They can’t because companies in China or elsewhere would simply copy them.

The above is introduced to argue that this space is a mirror of the wider economy. Undoubtedly, as far as this space is concerned, Sec has been too much of a luddite.

That might change. As an independent and apolitical institution, Sec is ruled by five commissioners who decides matters by holding a vote.

For many months now, this commissioners set-up has not been functioning very well because there have not been five commissioners, but that is to change very soon.

Trump has nominated Elad Roisman (pictured above on the left), currently chief counsel for the Senate Banking Committee, to be the fourth commissioner.

He is going through the approval process, with our guess being that he might be like Hester Peirce, going by his background.

He has made no comments regarding this space as far as we are aware, but he appears to have a republican worldview, and republicans tend to like free markets as well as innovation.

If that is indeed the case, then in many issues we would have two v two. That’s because Jay Clayton has said the current rules work perfectly fine, so any adaptation to the digital age from his perspective appears to be unnecessary.

The other commissioner, Robert Jackson, sided with Clayton on the bitcoin ETF, which itself can be taken as a measure of how much Sec cares to accommodate innovation.

It thus might well be the case that the fate of many matters rests on the shoulders of one woman, Allison Herren Lee (pictured on the right), the likely pick for nomination.

Little is known about her except that she started her career in 1997 as a Law Clerk at the Colorado Supreme Court. After some time in private practice, she joined Sec as Enforcement Counsel in 2005. That’s until January this year when she leaves to work for Congress Park Consulting.

That consulting firm might mislead in name for it has nothing to do with Congress as far as we can see and has instead much to do with financial advice. Their about page says:

“With the demise of Merrill Lynch (saved from bankruptcy by Bank of America) and the failure of almost every major investment banking firm and many major banks, it was apparent that there was a better way forward for clients than being tied to major financial institutions whose priorities were clearly not aligned with their clients’ best interests. This was the catalyst that inspired Congress Park Capital.”

The above could very well be the opening words to describe bitcoin, but we are sort of reading tea leafs here.

Her Twitter, which she appears to have stopped using in December, looks like a typical twitter of a somewhat politically active or focused Democrat supporter.

This space has plenty of Democrats and plenty of Republicans with blockchain tech able to offer both sides quite a lot of things, including cooperatives, for example. Thus making this space politically neutral in that regards.

But how she sees it, is a different question. And the answer to that we currently do now know. If she does, however, realize that something did go wrong in 2008, then presumably she also realizes that serious reforms are required and that the government should not stand on their way when they are very much voluntary optional choices.

She might perhaps think that fintech companies should be encourages to compete with banks, so keeping banks accountable, and she might think that many Sec rules need to be changed to accommodate tech companies which are very different from any other company that existed while such rules were implemented.

In other words, she might be supportive of this space, but it could easily be the opposite. If she is supportive, then Sec might hopefully change and might start doing its job properly by analyzing why they are failing to promote capital formation and what they can do about it.

If she is not supportive, then Sec should be ignored and the focus should move to Congress as well as other jurisdictions which are far more accommodative.

Until we know either way, it is unlikely anything good will come from Sec as far as this space is concerned and the wider tech industry. So the best we can hope for is that they mind their own business because serving the public by promoting capital formation is not quite one of them, or so it appears in any event.

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