First, we want to take this opportunity to express our gratitude to everybody out there in the Urvin community. Last week was a milestone for us as we released the long-awaited Urvin Finance Beta version.
At this exact moment, thousands of new users are getting their first look at our super-sexy, data-driven, community-powered social platform. We’re already receiving all kinds of awesome feedback from you.
Keep it coming—the good, the bad, and the ugly. We’re here to evolve. As Bob Dylan once said, the artist should always be in a constant state of becoming. You can help us become bigger, better, and dare I say it, sexier.
Our mission is to empower individual investors. This platform will go a long way toward fulfilling that goal.
But we need you to be a part of it. We can already see communities coming together on the platform. We’re seeing posts. We’re seeing engagement. And we’re sharing knowledge, information, and experience with one another. That’s what it’s all about.
So without getting all mushy, we’re honored to share this journey with you. Damn it. I told myself I wouldn’t cry…
Anyway, while I take a minute to get my sentimental shit together, you should go to urvin.finance and sign up so we can get this thing in your hands. (Sorry if that sounded dirty. It was mostly unintentional.) If you’ve already joined the list, check your email (and maybe your spam folder) for your invite.
So that’s the fun stuff. Now, on to the usual shenanigans.
The Chair Witch Project
In the battle between regulators and unbridled abuses by financial firms, we take the side of individual investors. So if we view regulators as taking steps to control these abuses, and protect individual investors, we support those efforts. When we think they haven’t gone far enough, we push them to do better. When we think they’re totally blowing it, we call them out.
From what we can tell, Gary Gensler’s SEC is actually trying to protect individual investors much of the time. And in doing so, the Commission is actually making up for many, many years of neglect.
Alternatively, there is a recurrent theme in some quarters of Congress which holds that regulators are guilty of widespread overreach - that they’re doing too much - and that SEC Chair Gary Gensler is guilty of nothing less than tyranny itself.
So deep and great is Gensler’s tyranny that Ohio Congressman Warren Davidson (R) has called for his dismissal with co-sponsorship from House Majority Whip Tom Emmer (R-MN). This termination would be just one prong of the SEC Stabilization Act. Filed on June 12th, the Act—if passed—would also result in a reconfiguration of the Commission.
We’ll talk a bit more about what that means in just a moment. But first, we have to make a few things clear. On the subject of tyranny…we’re against it. Tyranny is bad, mmkay?
We remain unequivocal in our support of American independence from the tyrant, King George III. And we’re willing to quarter soldiers just to prove it.
So in that patriotic, revolutionary spirit, we have no choice but to examine Davidson’s claims. But to be clear, this is not because we believe the SEC Stabilization Act is something meriting serious consideration.
Nor is it because we’re here to defend Gary Gensler. He spent almost 20 years working for Goldman Sachs. He can take care of himself.
But there are several deeper implications to consider here. The SEC Stabilization Act will not pass, but it is being used as a weapon against reform. This is another in a long line of tactics used by those who oppose regulatory reform all rooted in manufactured outrage and ad hominem attacks.
We should know. Virtu CEO Doug Cifu once called us grifters.
The Tyranny of Evil Men
Is Gary Gensler really guilty of tyranny? Well, he was the coxswain for his University of Pennsylvania rowing crew back in the ‘70s. Only his teammates will ever know how truly cruel and demanding he really was.
However, where the public record is concerned, Gensler departed his role as co-head of Goldman Sachs finance in 1997 to join the Clinton administration. Since then, the highlights from his stat sheet include: significant contributions to authorship of the Sarbanes-Oxley Act—which tightened accounting standards after the Enron crisis; a tenure as chair of the CFTC, where he was once described as "one of the leading reformers after the financial crisis”; and citation in 2010 as a major force behind the Dodd-Frank Wall Street Reform and Consumer Protection Act.
That’s some pretty dark stuff, at least if you’re a publicly elected official suckling at the corporate teet.
It’s possible tyranny is in the eye of the beholder.
It is also entirely possible that House Freedom Caucus member Warren Davidson has a slight history of hyperbole. For instance, in January of 2022, Warren Davidson likened COVID-19 ordinances in Washington D.C. to the Holocaust.
Anybody feel like this guy failed the analogies part of his SATs?
Your Connection is Unstable
Now, on to a proposed pile of legislation that is as dangerous as it is absurd. Davidson and Emmer’s SEC Stabilization Act includes three primary items:
This, says Warren Davidson, would bring order to a regulatory agency run amok.
Speaking before the House, Davidson outlined Gensler’s acts of tyranny, which include averaging “more than two rules proposals a month,” maintaining “a hotel California rule for crypto where you can check in anytime you like but you can never leave,” and “inappropriately provid[ing] inappropriately short comment periods.”
Bro. We The Investors literally submitted more than 5,000 comments on the last set or rules. Don’t blame your poor clock management on the refs.
There may be plenty of space to debate Gensler’s tactics and whether they will ultimately bear fruit for investors, but the characterization of Gensler as tyrannical is kind of funny when you consider its source.
When Warren Davidson tweeted about his bill on June 14th, he said “The market must be protected from the current tyrannical @SECGov Chair. Last night I joined @CNBC to talk about the #SECStabilizationAct and my plan to #FireGaryGensler."
By way of endorsement, the always eloquent Doug Cifu tweeted “👍 👍 👍 🙏”
We don’t want to veer too far out of our lane here, but rich assholes praying to protect piles of ill-gotten money from regulation feels kind of like an abuse of worship.
The real point is that Doug Cifu—CEO of Virtu, self-appointed attack dog on behalf of market makers, and a man with a enough money that he could vacation on islands where you pay to hunt humans for sport (not that he necessarily does—just that he could)—agrees that Gary Gensler is a tyrannical regulator hellbent on dismantling free markets.
You Must Whip It
House Majority Whip Tom Emmer agrees with enough conviction that he put his name on a bill whose passage is far-fetched at best. This is a threat, if only because it creates pressure for other Republicans to sign the dubious filing.
So what Emmer’s deal?
Well, back in March ‘22, he joined Davidson and six other Congressional Reps in opposing the SEC’s FTX inquiry. The signees, characterized as the Blockchain Eight, positioned themselves sternly against regulation in the crypto space.
Remarkably, the Blockchain Eight was a makeup of four Democrats and four Republicans, proving that bipartisanship is possible when it comes to accepting campaign contributions from alleged criminals.
Emmer went so far as to write at the time, “My office has received numerous tips from crypto and blockchain firms that SEC Chair Gary Gensler's information reporting 'requests' to the crypto community are overburdensome, don't feel particularly ... voluntary ... and are stifling innovation."
As we know today, FTX’s “innovation” would cost crypto holders billions. The SEC’s inquiry yielded widespread evidence of fraud. Today, former FTX CEO Sam Bankman-Fried wears a court-mandated ankle bracelet while living with his parents and awaiting trial.
So yeah…that remark from Emmer…aged poorly.
And today, the same guy says the SEC is out of control and must be stabilized.
Let it not be lost on us that Davidson and Emmer filed their Act less than two weeks after the SEC announced what may prove landmark lawsuits against crypto exchanges Binance and Coinbase.
The Warren Commission
So what’s the big plan for stabilizing the SEC aside from ousting Gensler the Hun?
Warren Davidson’s big idea is to restructure the current Commission. Arguing that Gensler’s authoritarian rule has all but erased the impact of his fellow Commissioners, Davidson has called for the chairmanship to be eliminated. In its place, an Executive Director answering to the Commission would be appointed.
Additionally, a seat would be added to the Commission to bring the size to 6 total members.
Historically, the balance of power in the Commission is based on who controls the White House - the Chair is appointed by the President. Otherwise, commissioners are always balanced between Republicans and Democrats. During a time of Democratic rule, the Commission leans Democratic–three members to two. The reverse is true when a Republican sits in the Oval Office.
So Davidson’s idea is that neither party shall ever have more than three Commissioners…or, clearly, less than three Commissioners.
So the balance will always be three to three. We’re not here to get political, but have you ever spent a minute in the ideological chasm between Republicans and Democrats when it comes to regulation? You can’t see one side from the other.
Who in their right mind would ever support this kind of gridlock? I guess somebody who likes things the way they are.
Let’s put aside the implications, for a moment, of a bill that will never actually be passed into law. Let’s talk about political principles for a moment.
Republican lawmakers have long rallied voters over the fear that Democrats will “pack the courts,” manufacturing new Supreme Court seats and using this as a loophole to manipulate the balance of power.
It hasn’t happened.
On the other hand, the SEC Stabilization Act proposes to do exactly that to the balance of power in America’s chief financial regulatory agency. This bill proposes an end-run around the balance of power chosen by voters.
If you’re a Republican lawmaker, you see the philosophical inconsistency, right?
Wait…don’t answer yet.
Mad As Hell?
So what’s the real point of all this? Davidson and Emmer want you to be outraged. They want you to feel that your freedoms are being squashed by the SEC’s attempts at regulatory reform. They want you to think you’re the one being regulated.
That’s not what’s happening.
So what’s really happening?
They’re running pass protection for the guys who really deserve your outrage. Three thumbs up says Doug Cifu. Surely one of those thumbs belongs to a lobbyist, working hard on behalf of wholesalers like Virtu to keep a few Congressman on their side, to prevent regulatory reform, to keep a lazy river made up of your money flowing in their direction.
Clearly, they’ve got Davidson, Emmers and a handful of other Republicans on the raft with them. But this isn’t about politics. This is about what’s right for individual investors and fair markets.
So we urge undecided lawmakers, regardless of your affiliation, to do the right thing. Reject this bill. Don’t put your name on it. In due time, that signature will be as embarrassing as the one calling to prevent an investigation into FTX.
And to individual investors, we urge you to contact your congressional representatives. Tell them how you feel about efforts to prevent investor protections. Tell them that there are more of us, and that we have more power than the lobbyists.
But say it nicely…ish.
What Condition Your Commission Is In
So what of that tyrant…Gary Gensler?
We’re not here to tow the party line for Gensler, the Commission, or anybody else for that matter. We’re here to support rights and protections for individual investors. And from our view, Gensler’s Commission is willing to take steps to further those rights and protections.
As we’ve said throughout—and by way of our comment letters—the reforms proposed by the SEC day are far from perfect. That’s kind of the whole point of the comment letter process.
But from our perspective, these proposals mark several big strides in the right direction.
We support these strides without reservation. And nobody is paying us to say it.
So when somebody tosses around words like tyranny, and you don’t see the King of England lurking in your bushes, be very suspicious.
Dave Lauer is a co-founder and CEO of Urvin Finance, where he leads the team in building Urvin Terminal. Prior to founding Urvin Finance, Dave spent over a decade advocating for financial market reform after quitting his job as a high-frequency-trader.