Dive Brief:

• Paul Atkins, nominated by President Donald Trump to lead the Securities and Exchange Commission, faced scrutiny for potential conflicts of interest during a hearing Thursday before the Senate Banking Committee. 
• Sen. Elizabeth Warren, D-Mass., while questioning Atkins, noted that as SEC chair he “will be in a prime spot to deliver for all those clients who have been paying you millions of dollars for years.” She referred to Patomak Global Partners, a consulting firm founded by Atkins that has served financial institutions including digital-asset firms. Decrying “breathtaking” potential conflicts, Warren called on Atkins to “commit to a higher standard of government ethics.”  
• “Senator Warren, I have abided by the Office of Government Ethics process,” said Atkins, who served as an SEC commissioner from 2002 until 2008. In response to a question from Warren, he declined to say whether, after his confirmation, he would reveal the names of entities that purchase Patomak.

Dive Insight:

Atkins in a March 20 letter to OGE said that he would resign his position as chief executive of Patomak and divest his interest in the firm within 90 days of his confirmation as SEC chair by the Senate.

Atkins also said he has resigned from the advisory board at Securities Inc., a financial services company that tokenizes private funds, and will divest his vested stock options in the firm within 90 days of confirmation.

The OGE filing by Atkins left Warren unimpressed.

“Mr. Atkins has spent almost his entire career helping billionaire CEOs like Sam Bankman-Fried, who committed one of the biggest financial frauds in U.S. history as the CEO of the failed crypto platform FTX,” Warren said.

“It is the SEC job to ensure that our capital markets remain an engine for economic growth and innovation that requires stamping out fraud and self-dealing in our markets so that giant corporations don't scam average investors out of their retirement savings,” she told Atkins and the other senators on the committee.

Atkins, in opening remarks, said he believes financial companies that deal in digital assets lack adequate federal oversight.

“Since 2017, as I have led industry efforts to develop best practices for the digital asset industry, I have seen how ambiguous and non-existent regulations for digital assets create uncertainty in the market and inhibit innovation,” he said.

“A top priority of my chairmanship will be to work with my fellow commissioners and Congress to provide a firm regulatory foundation for digital assets through a rational, coherent, and principled approach,” Atkins said.

Flagging what he cast as excessive regulation, Atkins said that he would withdraw an SEC mandate that companies report on their environmental, social and governance performance, a top priority of former SEC Chair Gary Gensler.

“I want to get politics out of the financial markets and out of how the SEC interacts with the financial markets,” he said.

“Unfortunately, there were some out there who were using other people's money to try to influence corporations through the distortions of the corporate governance process and that sort of thing,” he said. “So that will end, and I and we will have protections in place, so that, you know, that money managers and others will be focused on actual, you know, investment strategy and not all politics.”

Atkins declined to say whether he favors abolishing the Public Company Accounting Oversight Board and giving the SEC the responsibility for regulating the accounting firms that audit public companies.

“I think it’s not in my power — it’s up to you all,” he told the committee. “I would support whatever comes.”

The PCAOB for years has been in the cross-hairs of conservative think tanks and Republican lawmakers.

The board has “proved to be ineffective, costly, opaque and largely impervious to reform,” according to “Mandate for Leadership,” a key document written by Project 2025, a Heritage Foundation group aimed at influencing the Trump administration.

Atkins acknowledged during the hearing that he provided feedback to authors of the document, which cites his contribution.

“To reduce costs and improve transparency, due process, congressional oversight and responsiveness,” the PCAOB should be abolished, with its regulatory role merged into the SEC, Project 2025 said.