SEC’s Uyeda calls Gensler regime an ‘outlier,’ discusses climate rule’s future

Acting SEC Chair Mark Uyeda on March 6 said the agency under former Chair Gary Gensler was an “outlier” in terms of its rulemaking and enforcement. He also discussed the future of the agency’s climate disclosure rule.

“I’ve been at the SEC for nearly 19 years, served under six different chairmen. And between enforcement and on the rulemaking side, what I saw that happened the last 3½ years of the Biden administration was definitely an outlier in terms of the breadth and the scope, especially (because) we’re not coming out of a financial crisis,” Uyeda said at the Wall Street Journal CFO Network Summit in New York.

While serving as a Republican commissioner in the Biden administration, Uyeda was a frequent critic of Gensler’s rulemaking agenda and enforcement tactics, alongside fellow Republican Commissioner Hester Peirce.

Peirce, who leads the SEC’s new Crypto Task Force, said March 5 that the agency is reversing course on a previous “regulation by enforcement” approach to cryptocurrency.

When asked what specifically went wrong under Gensler’s leadership, Uyeda responded: “I think it was overly ambitious. The way I look at financial regulation is we’re not a speedboat. Think of us as one of those really long, super-sized freighters; we may need to make course corrections, but you want to be very methodical, very thoughtful in how you change direction.”

An especially contentious rule promulgated under the Gensler regime was the SEC’s climate disclosure rule. The rule, finalized in March 2024, requires public companies to divulge a host of climate-related information in their registration statements and periodic reports. After its finalization, the rule saw nine lawsuits filed against it. The 8th U.S. Circuit Court of Appeals in St. Louis agreed to hear the lawsuits challenging the rule on a consolidated basis, and the agency voluntarily halted implementation of the rule in April, pending the court’s ruling.

On Feb. 11, Uyeda announced that he had asked SEC staff to request a delay in the court’s oral arguments, allowing more time for the commission to “deliberate and determine the appropriate next steps in these cases,” according to a public statement from the acting chair.

Uyeda said March 6 that he wants a “different” commission to decide, “what should our litigation strategy be on this? Should we continue to support this rule, defend this rule? Should we do something else?” adding, “I think I’ve made my views on this rule pretty clear.”

Since Gensler and former Democratic Commissioner Jaime Lizarraga left the agency in January, the SEC currently has only three commissioners, giving Republicans a 2-1 majority. Both Peirce and Uyeda, the commission’s two Republicans, voted against adopting the climate disclosure rule.

In April, Uyeda said publicly that the rule violates existing law, as it mandates disclosures that are not financially material, among other things.

The acting chair reiterated that position again March 6, noting that while certain environmental factors may be material to investors, “the problem I saw with this rule is it was now going after nonmaterial disclosures.”