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SEC’s Gary Gensler passes the buck

It’s bad enough that our political class never wastes a good crisis pursuing crazy policies that sound good on paper but usually fail in practice (ObamaCare). It’s another thing to make the crisis – in this case rising energy prices and rampant inflation – worse. But Gary Gensler wants to do just that.

You might be wondering why a guy whose primary job is supposed to be protecting investors from pump-and-dump schemes and the like would meddle in our energy problems. But Gensler’s tenure as chairman of the Securities and Exchange Commission has been filled with odd decrees and windmill-like excursions that seem far removed from the commission’s core business.

No help for the little guy

As this column has shown, for example, Gensler seems willing to do so turn the structure of the stock market upside down although trading has never been easier or cheaper for the average investor; He seems to think some hedge funds are robbing the little guy without much evidence.

But if Gensler has his way, he won’t protect the little guy. According to one of the new proposals, it will be large, experienced investors putting money into private equity that will need to be protected somehow through heightened disclosures and other unnecessary rules.

It’s another non-solution in search of non-scandal for personal gain, I’m told.

Gensler’s proposals are likely aimed at building his credibility on the road with his real boss — not Joe Biden, but private-equity-hating progressive Massachusetts Sen. Elizabeth Warren, who has de facto veto power over key Biden appointments.

Traders work on the floor of the New York Stock Exchange.
Traders work on the floor of the New York Stock Exchange.
Spencer Platt/Getty Images

Gensler has made it clear in DC that his next post after the SEC should be Treasury Secretary, and he needs Warren in his corner in order to make this possible.

Things could get even weirder in Genslerland this week as the SEC chief seeks to further solidify his relationship with Warren, I’m told. I say odd because the last thing US consumers need is more ESG – green social governance – enactments that will result in exploration being scaled back as oil and gas prices skyrocket as a result sanctions against Russia about his invasion of Ukraine.

Wall Street executives following Gensler’s work expect to be impacted by proposed new disclosure requirements for publicly traded companies and asset managers around ESG goals.

The move comes about a year after Gensler and his task force began “studying” the supposed need for companies to tell investors how they plan to make the world a better, brighter place — rather than just hiring employees and serving investors .

Sen. Elizabeth Warren (D-MA) attends a Senate Armed Services hearing on Capitol Hill March 15.
Sen. Elizabeth Warren (D-Mass.), who appears to be Gensler’s true boss.
Drew Angerer/Getty Images

Wall Street is gearing up for Gensler to start requiring that every publicly traded company provide detailed reports on how they plan to reduce their carbon footprint, seek and hire various candidates for board seats, and lots of other ESG stuff that Elizabeth Warren, Bernie Sanders and others will spawn AOC swoons.

Money managers are likely to face the same types of disclosures about how they allocate capital to green projects that meet ESG standards, these people tell me.

If you think all of this is a bit off-key given what’s going on in the world these days, you’re not alone.

Before the sanctions, Wall Street invested in Russian oil and gas because it’s a surefire moneymaker. These Russian companies are often hidden from the public eye (and ESG policies) as seemingly conventional investments in emerging markets when they are not. On the other hand, if investors want to follow ESG guidelines, they are prevented from investing money in US oil producers.

It’s the same ridiculous double standard that means the US will be forced to buy oil from other shady nations (our friends in Venezuela), even if we boycott Russia to keep gas prices from going above $8 a barrel, to compensate for the declining domestic production.

And that was all before the SEC and Gensler further cemented ESG mandates in corporate law with new disclosures and possibly more. Warren will of course cheer for him; the American people, who pay for energy through their noses, not so much.

Citigroup Headache

Citigroup’s messy relationship with Russia is also likely to be costly.

The US bank has the largest exposure to Russia of any major US bank, nearly $10 billion, the filings show.

For at least last year, the bank has wanted to sell its Russia unit, possibly out of concern that doing business in Putin’s country would make it impossible to show virtue about how bad it is to live in the US, as many companies do today likes to do to gain plus points with left-handers in Washington.

The Citibank logo
Citi has been trying to sell its Russia unit for the past year.
Andrew Kelly/REUTERS

Putin’s invasion of Ukraine and killing of innocent civilians and the sanctions it triggered have made the sale all but impossible; Western buyers don’t seem interested. A Chinese bank run by China’s oppressive Communist Party may step in, but the visuals of that aren’t appealing.

Meanwhile, analysts are debating the financial hit Citi will suffer if its Russian assets deteriorate.

Odeon Capital’s Dick Bove tells Fox Business’s Eleanor Terrett that Citi could lose at least $1 billion from Russia, but “that’s spit in relation to the size of the company’s balance sheet.”

True, but it should be clearer the next time Citigroup joins the crowd signaling virtues over America’s ills.

https://nypost.com/2022/03/19/secs-gary-gensler-passes-the-buck/ SEC’s Gary Gensler passes the buck

DUSTIN JONES

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