Senator Elizabeth Warren Questions SEC Nominee Paul Atkins

Thank you, Mr. Chairman. So, Mr. Atkins, you served as an SEC Commissioner from 2002 to 2008. The lead-up to the 2008 financial crash that crashed the markets, cost 10 million families their homes, and cost millions more their jobs. Your job was to spot and head off risks that were building up in financial markets, but you showed staggeringly bad judgment. I just have a few examples since we're limited on time. In 2004, when Lehman Brothers and Bear Stearns asked the SEC to allow them to reduce their capital buffer by 40%, you said yes and voted to weaken the rules on investment banks. In August of 2007, after what was then, quote, the worst week for the American stock market in nearly 50 years, or five years, you bragged that, quote, principles of regulatory restraint have been affirmed as the market has continued to demonstrate a capacity to minimize and absorb systemic risk. Worst week, and you said, great, it shows how strong we are. And then days after Bear Stearns' collapse in March of 2008, you made fun of people who thought we needed stronger financial regulations, claiming they were, quote, wallowing in a period of irrational pessimism. And you said that, quote, regulators must not stand in the way of investors and market participants sorting this situation out. Yeah, it's sorted itself out with the biggest crash since the Great Depression. So, simple question, Mr. Atkins, were you wrong? Well, Senator Warren, you know, there are many, as we saw on the Congressional Literacy Site panel for TARP, there were many causes for the problems there with that subprime mortgage crisis. Yeah, but I'm asking about whether you were wrong about deregulation. No, I don't believe so. I think that was- Well, you know, both the SEC Inspector General and the bipartisan Financial Crisis Inquiry Commission said that the SEC's deregulation of investment banks contributed to the crisis. If you haven't done it yet, I recommend that you read this, Mr. Atkins. Look, this job is about judgment. And holding up on your resume that you were one of the people on the job to exercise judgment in the run-up to the biggest crash since the Great Depression, and now your hindsight is not 20-20, it's 20-0. You still say that weakening those regulations didn't have anything to do with that crash. I really hope you will read the bipartisan analysis that says otherwise, because it's very dangerous to have you in charge of the SEC. Now, one of my other top concerns about your nomination, Mr. Atkins, is that your judgment will be influenced by more than an objective assessment of the data in front of you. After your stint as an SEC commissioner, you founded a consulting firm called Potomac Global Partners. Potomac counts every kind of financial firm subject to the SEC's rules among its clients, banks, asset managers, brokers, exchanges, fintechs, and crypto companies. Your clients pay you north of $1,200 an hour for advice on how to influence regulators like the SEC, and if you're confirmed, you will be in a prime spot to deliver for all those clients who've been paying you millions of dollars for years. So, Mr. Atkins, given how breathtaking your financial conflicts of interest are, I sent you a letter requesting that you commit to a higher standard of government ethics. Slow down the revolving door here. Several major financial regulators in the previous administration agreed to these higher standards, but you sent me a response 10 minutes before this hearing started saying, no, you think you've done enough. That is deeply concerning to me, but let's focus on just getting one thing straight. Your consulting company is estimated to be worth about $50 million. Will you at least disclose, you've said that you will sell it if you are confirmed, will you disclose who the buyers are and how much they pay so that we can make certain that these are not people who are just buying access to the future chair of the SEC? Well, Senator Warren, I have abided by the Office of Government Ethics. I have a question about selling Potomac Partners. It's an easy yes or no. I will abide by the process. So is that a no? You're not going to tell us who you sell it to and how much money you get to people who will have business in front of the SEC? You know, some people might call that a pre-bribe.