SEC Commissioner Lizárraga to Leave as Trump, GOP Take Over (2)

SEC Commissioner Jaime Lizárraga intends to step down on Jan. 17, leaving just one Democrat on the commission when President-elect Donald Trump returns to office.

Lizárraga told Bloomberg Law Friday that he’s leaving the Securities and Exchange Commission to spend more time with his family, as his wife, Kelly, battles breast cancer. The Democrat’s term was set to expire in 2027. The former congressional aide joined the commission in 2022, helping advance corporate reporting requirements on climate risk and data breaches while policing Wall Street.

“In reflecting on the challenges that lie ahead, we have decided that it is in the best interests of our family to close this chapter in my 34-year public service journey,” Lizárraga said in a statement. “Until my departure in January, I will remain fully engaged in the Commission’s ongoing work and activities.”

Lizárraga’s announcement came one day after Democratic SEC Chair Gary Gensler said he planned to depart Jan. 20, when Trump is sworn in as president. The two exits will leave Caroline Crenshaw as the sole Democrat on the five-member commission, serving alongside Republicans Hester Peirce and Mark Uyeda.

But the Republicans likely will need Crenshaw’s support to adopt new rules or scrap existing ones, even with a majority. SEC quorum rules dictate that 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.

Adding a third Republican to the commission would ease efforts to approve regulations without Crenshaw’s backing. But a new commissioner traditionally needs Senate confirmation before taking office.

Trump hasn’t announced who he is considering for spots on the commission after Lizárraga and Gensler leave. Former SEC Commissioner Paul Atkins and Willkie Farr & Gallagher LLP partner Robert Stebbins have been considered to be possible agency chairs, Bloomberg News reported earlier this month. Dan Gallagher, Robinhood Markets Inc. legal chief and a former SEC commissioner, said Friday he’s doesn’t want to lead the agency after he was seen as a candidate for the job.

SEC Journey

Lizárraga came to the SEC after serving nearly 15 years as a senior adviser to Rep. Nancy Pelosi (D-Calif.), including when she was House speaker. He also worked on the House Financial Services Committee and at the Treasury Department.

Lizárraga was a frequent ally of Gensler, usually voting with him to approve enforcement actions and rules over Republican opposition. With Lizárraga’s support, the SEC adopted corporate cybersecurity disclosure rules in 2023 and greenhouse gas emissions reporting regulations earlier this year.

One notable break from Gensler was Lizárraga’s vote against approving several Bitcoin exchange-traded funds in January.

“At the SEC, he has been an excellent partner in our work to protect investors, facilitate capital formation, and ensure markets work for investors and issuers alike,” Gensler said in a statement. “Jaime has been a wonderful colleague but more than that, a friend.”