President Biden’s big business action could be bad news for Wall Street titans like Ken Griffin — assuming the controversial effort ever makes it off the ground.
On Tuesday, it was reported that President Biden is quietly working on an executive order aimed at taking on big business and creating more competition.
The controversial order, which Biden could sign as soon as next week, is expected to prompt regulators to reconsider their rules for how their respective industries, from airlines to Internet providers, operate, according to Wall Street. seeks to circumvent traditional anti-trust enforcement actions by giving directions. Journal.
For the financial services industry, a person with knowledge of Biden’s agenda told The Post, this could mean additional scrutiny from the Securities and Exchange Commission.
Griffin’s Citadel Securities could be a target in the market-making space, while BlackRock, the world’s largest asset manager, Vanguard and State Street, could be getting a close eye in the asset management space, this person said.
Citadel is already criticizing SEC Chairman Gensler, who has been critical of its impact on the $45 trillion US stock market. In May, Gensler told Congress that he had instructed his employees to review whether new rules were needed to encourage competition among firms such as Citadel, which were able to protect the market by acting as wholesalers. to generate liquidity.
“One firm, Citadel Securities, has publicly stated that it executes approximately 47 percent of all retail volume,” Gensler said at the time. “In January, two firms executed higher volumes than all except one exchange, the Nasdaq.”
In the asset management space, BlackRock, Vanguard and State Street control about $15 trillion, or about three-quarters of the size of the US economy. Sources said the elite of the Big Three could be another focus for the SEC.
Of course, efforts to crack down on Wall Street titans will be met with fierce opposition by free market advocates and big government opponents, including business groups and Republican lawmakers.
And some critics are already predicting that the effort will be rejected by courts.
“It will generally be struck down by the court system,” said an antitrust attorney who works for the Federal Trade Commission.
“It’s a really bad idea,” said this person. “Disbelief is being used by thinkers as a cure-all for everything in society is wrong and it doesn’t work that way. Some companies are messing with people but you need to fix it on a case by case basis.”
“We have laws and antitrust agencies “directed to protect customers,” agreed Mark Jamieson, a visiting scholar and economist at The American Enterprise Institute, a conservative think tank. “Under the new law, everyone has a Distrust becomes the enabler.”
Of course, it’s not just Wall Street that will be affected, and the move to crack down on big businesses comes as tech giants like Facebook, Google and Amazon are in the crosshairs of regulators on both sides of the aisle.
“There won’t be a single part of the economy that won’t reach it,” Dan Caprio, co-founder and president of strategic risk firm Providence Group, told the Post. “I think people’s heads are spinning right now… this is uncharted territory for upheaval.”
“It’s a tectonic shift that has the potential for a lot of litigation,” Caprio said.
While the details of the planned proposal are still unclear, sources say the goal is to make rules similar to those that resulted from a similar executive order issued by President Barack Obama in April 2016, which resulted in the Department of Transportation giving airlines more clarity. The goods were required to be disclosed. fee, among other changes.
In a statement to The Post, Emily Simmons, a White House spokeswoman, said: “The president made clear during his campaign that he is committed to increasing competitiveness in the American economy, including banning no-nonsense agreements for workers. and protecting farmers from abusive practices, but there is no final decision on any action taken at this time.”