Crenshaw delivers stark critique as term ends
Caroline Crenshaw, the only remaining Democratic commissioner at the U.S. Securities and Exchange Commission, has issued a forceful warning about what she described as the rapid dismantling of financial regulation under the Trump administration.
Speaking at the Brookings Institution in a speech titled The Rubble and the Rebuild, Crenshaw stressed that her remarks were not a farewell address, even though her term officially ended last year. She has remained in office under an 18-month grace period, which expires this month, as the administration has declined to nominate a replacement for the seat traditionally held by a Democrat.
Concerns over erosion of market safeguards
Crenshaw said the pace and scale of deregulation in 2025 have been unprecedented, arguing that long-standing protections for investors and issuers are being weakened without proper analysis or public consultation.
“It has been unsettling to see how precipitously one Commission is willing to undo the work of the Commission that came before it — all without a single notice-and-comment rulemaking to date,” she said, adding that core principles underpinning U.S. capital markets are being eroded.
Markets likened to casinos
The commissioner warned that the current direction of policy risks transforming regulated markets into environments resembling casinos, where ordinary investors face heightened risks.
“Instead of safeguarding our markets for investors to fund their retirements in safe and sustainable ways, we are moving in a direction where markets start to look like casinos,” she said. “The problem with casinos is that, in the long run, the house always wins.”
Four trends cited as ‘the rubble’
Crenshaw outlined four developments she described as particularly damaging. These include the weakening of investor rights to ease initial public offerings, reduced transparency through lighter reporting requirements and fewer opportunities for public comment, efforts to steer retail investors into private markets without safeguards, and a sharp decline in enforcement actions and penalties imposed by the SEC.
She said cost-benefit analysis has been largely absent from policymaking, warning that the consequences could be severe over time.
Historical parallels and outlook
Crenshaw compared the current deregulatory push to the period leading up to the 1929 stock market crash, arguing that markets ultimately correct excesses, even if the damage becomes clear only later.
She cautioned against claims that the SEC is entering a “new day,” saying instead that darker times may lie ahead for U.S. capital markets.
An SEC without minority representation
Crenshaw is set to leave the agency by year-end. With no replacement nominated and another Democratic commissioner having resigned last year, the SEC is poised to operate without a minority-party commissioner for the first time on record, aside from a brief period in 2008.
While minority commissioners hold limited formal power, Crenshaw’s speech may represent one of the last public dissents from within the agency for the foreseeable future.
