President-elect Joe Biden has tapped Gary Gensler to lead the U.S. Securities and Exchange Commission, a sign of the administration's plans to take an aggressive stance on Wall Street.

An 18-year veteran of Goldman Sachs Group Inc., Gensler rose to prominence in the wake of the 2008 financial crisis as the hard-charging head of the Commodity Futures Trading Commission. There, Gensler pursued sweeping changes to swaps trading rules that were outlined in the Dodd-Frank Act of 2010 and led the regulator in pursuing Libor manipulation charges against some of the industry's biggest institutions.

Now, if confirmed, Gensler will take the reins at the SEC as it too faces urgent issues: Whether to mandate climate and political activity disclosures from publicly traded companies in the U.S., what cryptocurrency regulation needs to accomplish and how, if at all, to undo some of the overhauled corporate governance rules rolled out by his predecessor Jay Clayton.

"It's going to be a time of action at 100 F St. NE," said Justin Slaughter, a consultant and lawyer at Mercury Strategies, referring to the SEC's headquarters in an interview.

Gensler is currently a Massachusetts Institute of Technology professor leading the transition's agency review team for the Federal Reserve and banking and securities regulators, including the SEC. News of Biden's intent to nominate Gensler as SEC chairman was first reported Jan. 12 by Reuters.

The SEC marks the latest and highest-profile stop for Gensler in Washington, D.C.

In the Clinton administration, Gensler worked at the Treasury Department as assistant secretary of financial markets and undersecretary of domestic finance. He later served as a senior adviser to former Sen. Paul Sarbanes, a Democrat from Maryland who chaired the Senate Banking Committee, in drafting the landmark accounting rules known as the Sarbanes-Oxley Act.

Gensler was then picked by President Barack Obama as CFTC chair, though his confirmation was held up by Sen. Bernie Sanders, I-Vt., and Sen. Maria Cantwell, D-Wash., who said Gensler played a role while at Treasury in pushing legislation that created the lax rules around derivatives that helped cause the financial crisis years later.

Once at the CFTC, though, Gensler went on to become one of the agency's longest-tenured chairs, receiving accolades in the process from the likes of former Rep. Barney Frank, D-Mass., for his swift and often demanding approach to financial regulation.

"Over the past few decades, no regulator has proven more effective at getting more big rules done than Gensler," said Healthy Markets Association Executive Director Tyler Gellasch, who previously worked at the SEC under former Commissioner Kara Stein, in an interview. "And that's precisely what he's being asked to do again."

Priorities at SEC

With a new chair coming aboard, the SEC is at a crossroads.

The top securities market regulator has spent much of the past four years under Clayton pursuing an agenda intended to cut the red tape surrounding the U.S. capital markets but often prompted sharp backlash. It has raised the bar shareholders need to clear to put resolutions up for a vote at a company's annual meeting, cracked down on proxy voting and, at one point, pursued a plan to cut down on the number of institutional investors that need to publicly release quarterly reports about their holdings.

For Gensler, the challenge will be to balance calls to unwind some of those changes while advancing the SEC's work in other priority areas that range from prompting board diversity to cracking down on stock buybacks to developing a taxonomy for climate risk disclosures that would be central to the administration's decarbonization plans.

"It's going to usher in a new era at the SEC," said Kirsten Wegner, CEO of high-speed trading advocacy group Modern Markets Initiative, in an interview. "There will be a heightened sense of enforcement and stronger regulations."

Democrats and progressives have long pushed the SEC to standardize climate disclosures for publicly traded companies, a sticking point for sustainable investors, who say companies' own disclosures are rarely apples-to-apples with other firms.

SEC Commissioner Allison Lee, the senior Democratic member at the regulator, stressed the need for standardized climate disclosures from companies so that regulators can "assess systemic risk" in a November 2020 speech. Lawmakers on Capitol Hill have pursued legislation in recent years to require the SEC to mandate ESG disclosures. And a CFTC-assembled subcommittee of Wall Street executives, academics and sustainability experts wrote in 2020 that "a common set of definitions for climate risk data, including modeling and calculation methodologies, is important for developing the consistent, comparable, and reliable data required for effective risk management."

"Given the alarm bells being sounded by investors, companies, regulators, policymakers and advocacy groups like Ceres, Mr. Gensler will enter his new position with a clear mandate, and clear expectation, to act on the climate crisis," Ceres President and CEO Mindy Lubber said in a statement released after the early reports of Gensler's expected nomination.

The MIT professor is bound to take a close look at cryptocurrencies too, an area that could have bipartisan interest at the SEC considering Commissioner Hester Peirce's active push to develop a regulatory framework.

A senior adviser to the MIT Media Lab Digital Currency Initiative, Gensler has been researching blockchain and digital currencies for several years, according to the school's website. In a spring 2020 class on financial technology, Gensler expressed concern about the lack of protections for retail investors in the "lightly regulated" world of initial coin offerings, an area where Clayton's SEC cracked down in the bitcoin run-up of 2018. And while Gensler said he would not describe himself as a "Bitcoin maximalist" or an "all the way" minimalist, he did say cryptocurrencies have been a "catalyst for change."

"I think it's a really important technology, if nothing else, because it's been a remarkable catalyst for change on how central banks and others think about payment systems," Gensler said, according to a transcript of the lecture.