The SEC has announced that Commissioner Mark T. Uyeda has been designated Acting Chair of the SEC. As you know, Paul Atkins has been nominated to serve as Chair, following his confirmation by the Senate. Uyeda said that he is “honored to serve in this capacity after serving as a Commissioner since 2022, and a member of the staff since 2006….I have great respect for the knowledge, expertise, and experience of the agency and its people. The SEC has a vital mission—protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation—that plays a key role in promoting innovation, jobs creation, and the American Dream.”
According to the press release, Uyeda “was first sworn into office as a Commissioner on June 30, 2022, after being confirmed by the U.S. Senate. He was subsequently re-nominated and confirmed for a five-year term expiring in 2028.” He previously “served on detail to senior leadership at the U.S. Department of the Treasury and to Secretary Eugene Scalia at the U.S. Department of Labor,” and “to the U.S. Senate Committee on Banking, Housing, and Urban Affairs. At the SEC, he has served as Senior Advisor to Chairman Jay Clayton, Counsel to Commissioners Michael S. Piwowar and Paul S. Atkins, and Assistant Director and Senior Special Counsel in the Division of Investment Management.” Before joining the SEC, he served as Chief Advisor to the California Corporations Commissioner and was in private practice.
As one of his first actions, the SEC announced, Uyeda has “launched a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets,” headed by Commissioner Hester Peirce. The SEC “said the task force will be dedicated to coming up with a ‘comprehensive and clear’ regulatory framework for crypto assets.” Bloomberg reports that Peirce has been “nicknamed ‘Crypto Mom’ by the industry for her dissents against SEC enforcement actions on crypto companies.”
Some of Uyeda’s prior remarks and dissenting statements may provide insight into his perspective as Acting Chair. For example, in remarks in 2024 at PLI’s SEC Speaks, he expressed his concern that the SEC “has gone astray”: instead of focusing on “its narrow mission,” Uyeda feared, the SEC was acceding to the pressure of political activists who “seek to transform the agency’s authority to achieve policy objectives that are outside of its statutory mandate.” To illustrate, Uyeda highlighted two examples: the climate disclosure rules and the conflict minerals rules, which were adopted by the SEC over a decade ago and were presented as a cautionary tale. In Uyeda’s view, the SEC’s climate disclosure rules were “designed to alter the behavior of public companies in a manner that serves political interests that have otherwise failed to achieve such change through the legislative process.” What is the problem with these rules? According to Uyeda, the climate disclosure rules mandate disclosures that are “not financially material to investors,” and thus are not within the remit of the SEC: “[a]bsent financial materiality,” he contends, the SEC “lacks the authority to broadly regulate the operating activities of public companies under the pretext of disclosure requirements.” Rather, these national economic or political policy issues are a job for Congress. (See this PubCo post.)
In the ongoing debate over the reason for the decline in the number of public companies, Uyeda has asserted that the reason may well be the burden of regulation. To address that issue, Uyeda advocated that the SEC should “create a regulatory environment that appropriately balances the costs and benefits associated with any required disclosures, while considering its investor protection mission.” To find this balance, the SEC “can encourage capital formation by promulgating rules that: (i) are grounded in financial materiality and (ii) adequately consider smaller public companies’ ability to pay for the compliance costs.” (See this PubCo post.)
He also has suggested that private ordering might be the answer to the shifting Corp Fin interpretations of Rule 14a-8 (see this PubCo post), offered views on how to improve the disclosure rulemaking process (see this PubCo post), and advocated that the SEC undertake a more comprehensive review of the treatment of foreign issuers with a view toward the development of guiding principles—a “philosophy for when disclosure by foreign companies should be equivalent to disclosure by U.S. companies” (see this PubCo post and Uyeda’s dissent discussed in this PubCo post).
He also dissented from the adoption of the pay-versus-performance rules, objecting not only to the lapse of 12 years to final rulemaking, but more importantly to the failure, in his view, to comply with the APA and issue a re-proposal with updated data and analysis. (See this PubCo post.) Uyeda similarly focused on due process under the APA in his dissent from the adoption of the clawback rules, highlighting again the failure to issue a re-proposal. He also viewed the final rules as overly broad: the inclusion of “little r” restatements was a “dramatic shift” in the interpretation of Section 954, conflicting with the “statutory directive and even some of the underlying data.” (See this PubCo post.)
With regard to Enforcement matters, Uyeda has often issued dissenting statements. For example, he (together with Peirce) dissented in a series of actions against companies adversely affected by SolarWinds, arguing against charging victims of the cyberattack over omission of disclosure that the dissenters considered immaterial, in effect, a kind of regulation by enforcement. (See this PubCo post.) Similarly, the two Commissioners dissented in a matter charging McDonald’s with failure to disclose that the company exercised discretion in terminating its CEO “without cause,” allowing him to “retain substantial equity compensation.” The dissenters viewed McDonald’s as “the victim” of deception by the CEO, not as a “securities law violator,” contending that the SEC invoked “a novel interpretation of the Commission’s expansive executive compensation disclosure requirements.” They were concerned that the SEC’s action “creates a slippery slope that may expand Item 402’s disclosure requirements into unintended areas—a form of regulatory expansion through enforcement.” (See this PubCo post.) In another example, he dissented regarding charges against a company for inadequate internal accounting controls, contending that the SEC was interpreting the term too broadly—a kind of Swiss army knife—a “multi-use tool handy for compelling companies to adopt and adhere to policies and procedures that the Commission deems good corporate practice.” (See this PubCo post.)
According to Bloomberg, the “SEC is unlikely to adopt big rules or roll back old ones until another Republican joins the agency. Caroline Crenshaw, the SEC’s lone Democratic commissioner, effectively holds a veto over agency rulemaking….A three-member commission can only advance a regulation if all the commissioners participate in a vote to do so, unless there’s a recusal or disqualification, according to SEC quorum rules.”
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