Gary Gensler

• 1. Introduction

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  Gary Gensler spent the afternoon of the 9th of January 2024 doing damage control. At 4:11pm Eastern time, a post appeared on the Securities and Exchange Commission's account on X. It announced approval of spot bitcoin ETFs, a decision markets had awaited for months. Bitcoin's price jumped about 2.5 percent within minutes. The move was part of a swing worth roughly $40 billion in bitcoin's combined value. By 4:26pm, Gensler was retracting the news. He said the SEC's account had been compromised and the post was unauthorized. The real approval followed the next day. It was one strange afternoon in a long career. That career stretches from counting vending machine nickels in Baltimore bars as a boy to facing Elon Musk in federal court. How did a Wharton undergraduate who made partner at Goldman Sachs by age 30 end up as one of Wall Street's most persistent regulators? And what did two decades inside the machinery of American financial policy teach him about where the real risks were hiding?

• 2. A Vendor's Son

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  Sam Gensler sold cigarettes and serviced pinball machines in bars around Baltimore, Maryland. He sometimes brought his son along on collection runs. Young Gary counted the nickels that came out of those machines, an early brush with the practical side of money. He was born into a Jewish family in Baltimore, one of five children of Jane, née Tilles, and Sam Gensler. Gensler graduated from Pikesville High School in 1975. He was later named a Distinguished Alumnus there. From high school he went to the Wharton School at the University of Pennsylvania. He finished his economics degree summa cum laude in three years rather than four. He stayed on for a master's in business administration the following year. His identical twin brother studied at Penn alongside him. As an undergraduate, Gensler served as coxswain for the Penn crew team. He cut his own weight down to 112 pounds so the boat would meet its required weight. In 1979, fresh out of his MBA, Gensler walked into Goldman Sachs.

• 3. Partner By Thirty

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  Through the 1980s, Gensler worked as a top mergers and acquisitions banker at Goldman Sachs. He took charge of the firm's advisory work for media companies. He made partner at just 30 years old, one of the youngest people to hold that rank there at the time. He then moved into trading and finance in Tokyo, directing Goldman's fixed income and currency trading desk. While there, Gensler led the team that advised the National Football League on what was then the most lucrative deal in television history. That deal was worth $3.6 billion, selling the league's television sports rights. His final post at the firm was co-head of finance, overseeing controllers and treasury operations worldwide. After 18 years at Goldman, Gensler left the firm. President Bill Clinton had nominated him, and the U.S. Senate confirmed him, to serve as Assistant Secretary of the Treasury.

• 4. From Deregulator To Reformer

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  In 1997, Gensler became Assistant Secretary of the Treasury for Financial Markets. He advised the Treasury Secretary on managing federal debt and selling government securities. Two years later he moved up to Undersecretary for Domestic Finance, a post he held until 2001. Under Treasury Secretary Lawrence Summers, in 1999 and 2000, Gensler pushed for passage of the Commodity Futures Modernization Act. That law exempted over-the-counter derivatives from regulation. As Undersecretary, he also advised Secretaries Robert Rubin and Summers on financial institutions, capital markets, and government sponsored enterprises. The Treasury Department later gave Gensler its highest honor, the Alexander Hamilton Award, for his service. He also sat on the board of Strayer Education, a for-profit university, from 2001 to 2009. In 2001, Gensler joined the staff of Senator Paul Sarbanes, chairman of the Senate Banking Committee, as a senior advisor. There he helped write the Sarbanes-Oxley Act. It tightened accounting standards after the Enron and WorldCom scandals. The over-the-counter derivatives he had fought to exempt from regulation in 1999 would return to the center of his work less than a decade later.

• 5. Building The Swaps Rules

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  On the 18th of December 2008, President-elect Barack Obama announced his intent to nominate Gensler as the 11th chairman of the Commodity Futures Trading Commission. The nomination reached the Senate the following January. It met early opposition from progressive members of the Democratic caucus. Senators ultimately approved him 88-6, and Gensler was sworn in on the 26th of May 2009. He pledged to urgently close the gaps in the law and bring transparency to the over-the-counter derivatives market, to lower risks, strengthen market integrity, and protect investors. One assessment at the time called him one of the leading reformers after the financial crisis. Gensler worked with the Obama administration, Congress, and other regulators to overhaul a $400 trillion derivatives market. That market had sat at the center of the 2008 financial crisis. The effort was described as policing the Wild West of finance, the murky over-the-counter swaps market. When the Treasury Department released draft legislation on the topic, Gensler wrote to Congress arguing it did not go far enough. By the spring of 2010, Congress had moved toward his vision. It passed the Dodd-Frank Wall Street Reform and Consumer Protection Act that July. Afterward, Gensler led the CFTC's effort to write 68 new rules, orders, and guidances. The agency's reach extended from a $35 trillion futures market to the $400 trillion swaps market. Under his leadership, the bipartisan commission reached unanimous votes on more than 70 percent of its rulemakings. By the time Gensler left the CFTC in January 2014, the agency was nearly finished writing the rules required to carry out Dodd-Frank.

• 6. The Libor Tapes

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  Early in his CFTC tenure, Gensler listened to tape recordings of two Barclays employees. They were discussing plans to report false interest rates. Their target was Libor, the London interbank offered rate, an average interest rate used as a reference for many financial products. Those products include adjustable rate mortgages, student loans, and car payments. Gensler was later called a driving force behind the crackdown that followed. He worked with enforcement division director David Meister and his team to lead the investigation. The effort brought charges against five financial institutions for manipulating Libor and other benchmark rates. It produced more than $1.7 billion in penalties. Barclays alone paid $450 million in fines. Gensler called Libor unsustainable and argued it should be replaced as a benchmark rate. He also chaired the CFTC during the collapse of MF Global. He recused himself from that case because of his earlier relationship with the firm's chairman and chief executive, Jon Corzine. For his work reforming financial regulation, the Institute for the Fiduciary Standard awarded Gensler its 2014 Tamar Frankel Fiduciary Prize.

• 7. Wall Street's New Watchdog

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  In November 2020, Gensler served as a volunteer on the Biden presidential transition's Agency Review Team. It examined the Federal Reserve, the CFTC, the FDIC, the National Credit Union Administration, and the SEC. President Joe Biden then nominated him as the 33rd chair of the SEC, and Gensler succeeded Acting Chair Allison Lee. The Senate confirmed him 53-45 on the 14th of April 2021, filling the term of former chair Jay Clayton. Five days later, the Senate confirmed Gensler to a full five-year term running through 2026. He would not finish it. On the 21st of November 2024, Gensler announced he would step down at the end of Biden's term, effective the 20th of January 2025.

  Gensler told the Senate Banking Committee in September 2021 that the SEC needed large staffing increases to handle cryptocurrency and other digital assets. He likened the crypto market to a Wild West. He later testified that the SEC had no plans to ban cryptocurrencies outright. Still, he warned that many individual cryptocurrencies were likely to fail. Gensler opposed approving pure spot bitcoin ETFs, arguing bitcoin remained exposed to fraud and market manipulation. In January 2023, the SEC filed a complaint in federal court in the Southern District of New York. It accused both Genesis and Gemini of offering and selling unregistered securities. By the time Gensler left office, the SEC's stance on digital assets was being described as part of a broader War on Crypto. The issue had become a wedge in the 2024 presidential election.

  On the 6th of May 2021, Gensler testified before the House Financial Services Committee about the GameStop short squeeze. He also addressed Robinhood Markets, the collapse of Archegos Capital Management, and payment for order flow among market makers. He raised concerns about trading gamification in mobile apps and proposed new ESG disclosure rules. Robinhood Markets agreed that June to pay $70 million, settling a lawsuit from the Financial Industry Regulatory Authority. The regulator had alleged that Robinhood misled customers and approved inexperienced traders for risky options strategies. Regulators under Gensler also approved a Nasdaq rule requiring listed companies to disclose board diversity statistics. Courts later struck that rule down.

  In March 2022, the SEC approved rules requiring public companies to disclose climate risks and greenhouse gas emissions in their annual filings. The Wall Street Journal criticized the move as contrary to SEC history and sound regulatory practice. The paper accused Gensler of trying to regulate private companies by the back door, on behalf of BlackRock and other large investors. That May, the SEC proposed rules meant to curb greenwashing in ESG investment funds. By June it was reportedly investigating Goldman Sachs's own ESG funds for the same concern.

  In April 2022, Elon Musk disclosed a stake in Twitter. He then offered to buy the company outright for $43 billion, later raised to $46.5 billion. Twitter's board agreed to a deal at $44 billion. Musk tried to walk away that summer, citing unresolved questions about fake and spam accounts on the platform. Twitter sued him in the Delaware Court of Chancery to force the acquisition through. At the same time, the SEC was separately investigating Musk over a 2018 tweet claiming he had funding secured to take Tesla private. It also opened an insider trading inquiry into a $108 million sale of Tesla stock by Musk and his brother, Kimbal Musk. None of those fights touched the parts of Gensler's life that had nothing to do with regulation at all.

• 8. Life Outside The Agency

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  In 2017, Maryland's Senate President, Thomas V. Miller Jr., and House Speaker Michael E. Busch selected Gensler to chair the state's Financial Consumer Protection Commission. Under his leadership, the commission recommended changes to state law on standards of care, student loan servicing, and manufactured home purchases. Legislation that followed created a student loan ombudsman. By 2019, the state had also established a Student Borrower Bill of Rights. Gensler had already spent years in Maryland politics. He served as treasurer of the state's Democratic Party and worked on the campaigns of Senator Barbara Mikulski, Lieutenant Governor Kathleen Kennedy Townsend, and Governor Martin O'Malley. During the 2008 campaign cycle, he advised Hillary Clinton's presidential run and later the Obama campaign. In May 2015, he became chief financial officer of Clinton's second presidential campaign.

  With fellow Clinton Administration alum Greg Baer, Gensler co-authored The Great Mutual Fund Trap. Using empirical data, the book argues that actively traded mutual funds carry high fees and routinely underperform the market. It argues investors are better served by low-fee index funds than by trying to beat it.

  At MIT Sloan School of Management, Gensler holds the title of Professor of the Practice of Global Economics and Management. He co-directs the school's Fintech@CSAIL initiative. He is also a senior adviser to the MIT Media Lab's Digital Currency Initiative, teaching and researching blockchain technology and digital currencies. Gensler sits on the New York Fed's Fintech Advisory Group, a panel of experts who brief the New York Fed's president on financial technology. Students voted to give him MIT Sloan's Outstanding Teacher Award for the 2018-19 academic year.

  Gensler lives in Baltimore with his three daughters, Anna, Lee, and Isabel. He was married to filmmaker and photo collagist Francesca Danieli from 1986 until her death from breast cancer in 2006. Away from finance and politics, Gensler is a runner who has finished nine marathons and one 50-mile ultramarathon. He is also a mountain climber who has summited both Mount Rainier and Mount Kilimanjaro. Running marathons and climbing mountains, Gensler chose those challenges himself, unlike the regulatory posts Washington kept handing him.