Remarks by Chair Gensler Before the Investor Advisory Committee

Good morning. I am pleased to meet with the Investor Advisory Committee. As today’s meeting is the last of this Administration, I’d like to share some reflections about this Committee and its importance to everyday investors.

As is customary, I’d note that my views are my own as the 33rd Chair of the Securities and Exchange Commission, and I am not speaking on behalf of my fellow Commissioners or the staff.

When President Franklin Roosevelt and Congress enacted the securities laws in the 1930s, they had lived through the 1920s when hucksters, fraudsters, scam artists, and Ponzi-like schemers took advantage of investors. They learned what happens when unregulated markets were left on their own. They understood that protecting investors was critical to the functioning of capital markets.

In 1937, the SEC’s third Chair, William O. Douglas, went further in speaking of the importance of the SEC in fulfilling Congress’ vision. At his first press conference, he told members of the press that, in this country, “We have got brokers’ advocates; we have got Exchange advocates; we have got investment-banker advocates; and we are the investor’s advocate.” [1]

His words are every bit as relevant 87 years later. We, at the SEC, are the investor’s advocate.

Protecting investors is fundamental to each part of the SEC’s current three-part mission.

The first part of our mission is, in fact, to protect investors.

At its core, investor protection helps promote trust in our capital markets. Thus, it undergirds the second part of our mission, which is to promote fair, orderly, and efficient markets. The only way to truly have fair, orderly, and efficient markets is to look out for investors.

Further, investor protection is fundamental to the third part of our mission, to facilitate capital formation. Issuers benefit from the broad public’s trust in the markets and willingness to participate in offerings.

This Committee, in its current form, is a direct result of a breakdown in those markets—as witnessed in the 2008 financial crisis. As part of the Dodd-Frank reforms enacted after the crisis, Congress mandated the creation of the Investor Advisory Committee. Though the SEC had benefitted from earlier advisory committees, Congress created this committee to ensure that investors are able to make their voices heard in the Commission’s policy deliberations. The SEC may be the investor’s advocate, but we benefit from hearing directly from investors.

During my tenure as Chair, the Committee has raised important issues concerning everyday investors—including protections for older Americans, for self-directed investors, and for those investing in Special Purpose Acquisition Companies (“SPACs”).

Today, you will continue in that tradition and advise the Commission on mandatory arbitration clauses, as well as the risk and opportunities of everyday investors investing in alternative assets. The Committee also will discuss a recommendation regarding finfluencers and social media.

Investor protection promotes trust in our securities markets. It’s what brings investors and issuers to the market like fans to a football game. It’s what underpins the world’s largest capital markets. It’s what has contributed to our nation’s great economic success these last 90 years.

That’s why I have felt so privileged to lead this mission-driven agency these past four years and do my part on behalf of the American public.

It’s fitting that William O. Douglas’s words have long hung on a plaque outside of the Chair’s office at the SEC. From the 3rd to the 33rd Chair and beyond, the importance of investor protection transcends eras, [2] markets, and Commissions.

This Committee’s work gives those words, “we are the investor’s advocate,” added weight.

I thank all the members for your willingness to serve, and for sharing your important perspectives on behalf of investors.

1See SEC Historical Society, “William O. Douglas and the Growing Power of the SEC” (December 2005), available at https://www.sechistorical.org/museum/galleries/douglas/#note1.(go back)

2See Chair Gensler, “Eras Tour of The Securities and Exchange Commission” (June 2024), available at https://www.sec.gov/newsroom/speeches-statements/gensler-transcript-eras-tour-060624..(go back)