Biden’s pick for SEC flags trading app gimmicks

Gensler says protecting investors at core of commission’s duties.

President Joe Biden’s choice to head the Securities and Exchange Commission told Congress on Tuesday the agency should address how to protect investors who use online stock-trading platforms with flashy tech gimmicks that entice them to trade more.

Gary Gensler testified by video for his confirmation hearing by the Senate Banking Committee. He was asked about the roiling stock-trading drama involving Gamestop shares that has spurred clamor for tighter regulation of Wall Street. The trading frenzy in shares of the struggling video-game retailer lifted their price 1,600% in January, though they later fell back to earth after days of wild price swings.

“At the core it’s about protecting investors,” Gensler said. Among the issues to be examined, he said, is the use of “behavioral” technology in stock-trading apps. “What does it mean when you have behavioral prompts to get investors to do more transactions? We’re going to have to study that and think about it,” Gensler told the panel.

Also Tuesday, Biden’s nominee to run the Consumer Financial Protection Bureau, Rohit Chopra, faced some hostile questioning from Republican senators but appeared likely to be confirmed with Democrats controlling a Senate majority. And the Senate voted 84-15 Tuesday to confirm Rhode Island Gov. Gina Raimondo as commerce secretary. Raimondo will be responsible for promoting the nation’s economic growth. The Commerce Department comprises a dozen bureaus and agencies, and more than 40,000 employees.