GS Goldman Sachs Group Inc

By Andrew Ackerman and Dave Michaels 

WASHINGTON -- President-elect Joe Biden is expected to choose Gary Gensler, a former financial regulator and Goldman Sachs Group Inc. executive, to head the Securities and Exchange Commission, according to people familiar with the decision.

Mr. Gensler's nomination would please liberal Democrats who cheered the former regulator's tough approach to rule-making during the Obama administration, when he spearheaded the overhaul of derivatives markets mandated by the 2010 Dodd-Frank Act and oversaw enforcement actions against investment banks accused of manipulating benchmark interest rates.

The choice of Mr. Gensler, who declined to comment, wasn't final and could still change, the people said.

As head of the Commodity Futures Trading Commission from 2009 to 2014, Mr. Gensler developed a reputation among his colleagues for bare-knuckle tactics as he drove to create a regulatory framework for derivatives, a multi-trillion dollar market that had largely been free from federal oversight. By the time he left the commission, the rule set was largely complete, years before other regulators wrapped up their postcrisis work.

It was a surprising turn for the former Goldman executive who had previously resisted calls for additional derivatives regulation when he served in the Treasury Department under President Clinton. The decision to loosen the regulation of derivatives in the 1990s has been blamed for contributing to the financial crisis a decade later.

Mr. Gensler was tapped to lead the CFTC in 2009, as the agency's mission was expanding to address risks to financial stability posed by derivatives, financial instruments including options and futures that are derived from other assets. In that role, Mr. Gensler drew the ire of Wall Street banks as he implemented Dodd Frank.

"He was terrifically effective at the CFTC, he knows the markets as well as anyone on Wall Street, he's a smart and tough regulator who knows how to get things done, and he cares about investor protection," said Barbara Roper, director of investor protection at the Consumer Federation of America.

--Paul Kiernan contributed to this article.

Write to Andrew Ackerman at andrew.ackerman@wsj.com and Dave Michaels at dave.michaels@wsj.com

(END) Dow Jones Newswires

January 12, 2021 17:19 ET (22:19 GMT)

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