The Dodd-Frank Wall Street Reform and Consumer Protection Act “has backfired,” Securities and Exchange Commissioner Daniel M. Gallagher Jr. told a U.S. Chamber of Commerce audience Tuesday.
The agency is “only halfway done with Dodd-Frank mandates five years later. We haven’t gotten to any of the core issues of government’s role in private markets,” Mr. Gallagher said.
“If the SEC seems political nowadays, it’s because of Dodd-Frank,” said Mr. Gallagher, who criticized the corporation finance division of the commission for pursuing a “radical shareholder-rights agenda. It has confused protecting investor activism with protecting investors,” he said.
By contrast, the investment management division “has made great strides in recent years, providing better and more useful data,” even though the money management industry “has been under attack from regulators since the financial crisis,” Mr. Gallagher said.
He also praised the enforcement division for “an admirable job, resisting calls to storm Wall Street with pitchforks,” but he cautioned the Office of Compliance Inspections and Examinations “to resist the urge to undertake rule-making through examination.”
The Financial Stability Oversight Council created by Dodd-Frank “has proven to be a poor construct for monitoring and addressing systemic risk. The (Financial Stability Board) is even more dangerous,” Mr. Gallagher said.
Some of Mr. Gallagher’s harshest words were for the Department of Labor’s proposed conflict-of-interest rule. “They are intent on getting this out. If they roll this out, we will have a silly, really intrusive DOL rule. I think you’re going to see the elimination of an entire class of accounts. This is a total gift to the plaintiffs’ bar,” he said.
