Commissioner Johnson says that there should be "heightened penalties" for the use of AI to engage in fraud. Why? Shouldn't the penalties be reflective of the fraud and not of the use of AI? It seems absurd to argue that penalties should be set at a lower level for fraud that does not use AI, but that is the flip side of Commissioner Johnson's argument. Rather than treating AI as an overwhelming threat to the financial system that is fundamentally different from all else (fraud is bad, and…

There are a lot of tables in this new Report. It would be interesting to know who finds the information useful, which of the tables they find useful and what is the use case. Publishing information (and more importantly collecting it) that has no use case does not serve a public interest; it's just an expense.  

Here are some relevant questions: What is the "large benefit" that investors, issuers, economists, academics and the public at large will receive from this data?  …

This case is not about the question of whether digital assets are "securities."  One can assume that they are securities.  

There is a fundamental problem that runs through SEC rulemaking under the current administration. It is the agency's apparent indifference to the differences between types of financial products and their impacts. One example is the net capital rule. To the extent that the SEC analyzes the impact of the net capital rule on entities required to register…

In response to Commissioner Peirce's argument that the SEC heaps regulatory costs on small companies, which has been a driver in the decline of public companies, Commissioner Lizárraga's argument is essentially: "well, it could have been even worse." At least that response may be true. In a recent statement, SEC Chair Gensler blamed the decline over almost thirty years in exchange-listed companies as being a consequence of the war in the Ukraine and/or the pandemic. (See .)