Former SEC Chair Gary Gensler Talks Semiannual Earnings Reports

Summary

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Bloomberg Talks – May 9, 2026

Episode: Met CEO and former SEC head Gary Gensler Talks Semiannual Earnings Reports

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Episode Overview

This episode features an in-depth conversation with former SEC Chair and current MIT professor Gary Gensler about a major new SEC proposal: shifting public company earnings reporting from a quarterly to a semiannual (twice-a-year) schedule. Gensler offers critical analysis of the move, explores the potential impact on market transparency and insider trading, and shares insight from his regulatory experience. The discussion also touches on recent SEC enforcement actions, US-China economic relations, and market integrity concerns amid geopolitical tensions.

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Key Discussion Points & Insights

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1. The Proposal: Shifting to Semiannual Earnings Reports

• Background:
  The SEC has unveiled a proposal to reduce mandatory reporting for public companies from quarterly to semiannual. Current SEC chair Paul Atkins claims this would "provide companies with increased regulatory flexibility."

• Gensler’s Critique ([01:02]):
  Gensler rebuffs the proposal as unnecessary and potentially harmful:

  “No, I think this is really a solution in search of a problem. I think transparency is really important in our capital markets…It's part of why our American capital markets are so good.”
  (Gary Gensler, 01:02)

• Investor Impact ([01:34]):
  Timely quarterly reporting gives investors regular updates, contributing to stronger pricing and market stability:

  “What studies, economic study after economic study has shown is that that's a good thing, that creates a market environment where you can get a little higher price earnings ratio and a little less cost of capital because your investor base knows what's going on.”
  (Gary Gensler, 01:34)

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2. Drivers Behind the Change

• Who Wants This? ([02:06]):
  Gensler notes it’s not a groundswell from capital markets, but more of a top-down political push, referencing the Trump administration’s earlier efforts:

  “I think the president really wants it, but I really don't think the capital markets want it.”
  (Gary Gensler, 02:31)

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3. Transparency, Insider Trading, and Market Risk

• Insider Trading Risks ([02:44]):
  Reducing reporting frequency may make it easier to conceal insider activity and increase volatility:

  “Every six months putting out information means… our markets will be a little bit more volatile.”
  (Gary Gensler, 02:50)

• Analogy to ‘Lemon Markets’ ([03:26]):
  Gensler references Nobel laureate George Akerlof to explain how less information leads to adverse market selection and lower valuations:

  “If you let it be flexible, the lemons might not report, but you don't know who the lemons are… it might lower the valuation in the overall markets.”
  (Gary Gensler, 03:26)

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4. Rulemaking Process and Prospects

• How it Works ([04:08]):
  After a 60-day public comment period, SEC staff reviews input and commissioners may take 18-30 months to finalize a rule. Gensler encourages investor and public engagement.

• Historical Perspective ([04:54]):
  Quarterly reporting started voluntarily in the 1920s, became widespread in the 1950s, and was made mandatory in 1970, emphasizing its deep roots.

• Is It a Done Deal? ([05:14]):
  Gensler cautions that the decision is not final, highlighting the importance of the public comment process:

  “I think there's a public comment period and it really is important whether it's the media and especially large companies, investors and so forth, who might get in the ear of this White House.”
  (Gary Gensler, 05:14)

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5. High-Profile SEC Enforcement: Elon Musk and Disclosure Rules

• Musk’s Twitter Stock Purchase Settlement ([05:36]):
  Gensler, referring to the SEC’s lawsuit against Elon Musk for failing to disclose his Twitter share accumulation:

  “When somebody's accumulating shares in a company… If you accumulate over 5%, which Mr. Musk did, then you need to report… I'm proud that when I was chair of the SEC, we shortened that time period from 10 days to five days because that's really material, non public information.”
  (Gary Gensler, 05:58)

• Importance of Enforcement ([07:19]):
  He underscores strict enforcement and clarity:

  “The cop on the beat matters. And if the cop on the beat, like enforce and says…it's what lawyers call per se. It's just like you've gone too long, that's a violation.”
  (Gary Gensler, 07:19)

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6. US-China Relations & Market Impact

• Recent Developments ([08:15]):
  Gensler discusses efforts (with Ambassador Nick Burns) to ensure Chinese firms in the US adhere to American law, and the broader implications of current China trade tensions and President Trump’s visit to Beijing.

• European Model Rejection ([08:15]):
  He emphasizes opposition to semiannual reporting, as done in Europe:

  “I don't want to adopt the European approach that that capital markets has semiannual reporting. It's not as good.”
  (Gary Gensler, 08:15)

• Election-Year Dynamics ([09:02]):
  Speculates that soybeans, trade deal “deliverables,” and Taiwan are at stake, with market stability hinging on diplomatic outcomes.

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7. Market Integrity: Oil Futures and Prediction Markets

• Potential Oil Insider Trading ([10:18]):
  Host raises concerns about large oil futures trades preceding diplomatic news. Gensler frames this as a persistent challenge:

  “There's a real challenge around protecting markets, the integrity of markets against insider trading… we've seen this year these happenings where somebody gets into a market… sometimes it's even going into the oil futures markets.”
  (Gary Gensler, 10:47)

• Supervision & Legislation ([10:47]):
  He supports Congressional action to restrict government actors from trading in prediction markets.

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Notable Quotes & Memorable Moments

• On Transparency:

  “Transparency is really important in our capital markets…It's part of why our American capital markets are so good.”
  (Gary Gensler, 01:02)

• On Insider Trading Risk:

  “Every six months putting out information means… our markets will be a little bit more volatile.”
  (Gary Gensler, 02:50)

• On Perils of Less Reporting:

  “If you let it be flexible, the lemons might not report, but you don't know who the lemons are.”
  (Gary Gensler, 03:26)

• On Disclosure Enforcement:

  “The cop on the beat matters… it's what lawyers call per se. It's just like you've gone too long, that's a violation.”
  (Gary Gensler, 07:19)

• On Chinese Companies in US Markets:

  “That's good for the US Capital markets that we kept those [Chinese] companies here because we're like half the world's capital markets.”
  (Gary Gensler, 08:15)

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Segment Timestamps

• [01:02] – Gensler’s fundamental critique of semiannual reporting
• [02:50] – Insider trading risk explained
• [03:26] – “Market for lemons” analogy and its application
• [04:08] – Explanation of SEC rulemaking process
• [05:36] – Discussion of the Elon Musk/SEC settlement
• [07:19] – Importance of strong enforcement
• [08:15] – US-China regulatory context
• [09:02] – Geopolitics and capital markets in election season
• [10:47] – Oil futures trading, prediction markets, and market integrity

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Tone & Language of Speakers

• Gensler is frank, analytical, and occasionally humorous (acknowledging “shameless teases” about his own podcast).
• The hosts are probing but conversational, maintaining a mix of policy analysis and market pragmatism.
• Discussion is direct, with references to technical legal and financial concepts but explained in accessible language.

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Summary

Gary Gensler provides a staunch defense of the status quo—quarterly earnings reports—arguing that market transparency and integrity are vital for US competitiveness. He voices skepticism that the push for semiannual reporting comes from genuine market needs, instead attributing it to political momentum. The potential for increased insider trading and market volatility are highlighted, along with the importance of robust enforcement of disclosure rules. The episode contextualizes these regulatory debates within broader geopolitical currents, notably US-China relations and oil market volatility, offering listeners a comprehensive, real-world picture of market policy stakes in 2026.

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Transcript

[Indiana University Narrator]

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[Bloomberg Audio Announcer]

Bloomberg audio

[Bloomberg Host]

Studios Podcasts Radio news Public companies in the US Are required to report earnings every quarter, but that could change. This week, the U.S. securities and Exchange unveiled a new proposal that would require companies to report earnings semiannually. That's just twice a year.

[Bloomberg Interviewer]

The current SEC chair, Paul Atkins, said the proposed change would, quote, provide companies with increased regulatory flexibility. Critics say less frequent reporting could heighten the risk of insider trading. Joining us now on set is a former chair of the sec, Gary Gensler, now a professor at MIT and the co host of a podcast called Power and Consequences. I'll ask you plainly first, is this a good idea? Is the move away from quarterly reporting to semiannual reporting a good idea?

[Gary Gensler]

No, I think this is really a solution in search of a problem. I think transparency is really important in our capital markets. You just had a report about transparency, about UFOs. This is a little bit different, but we've been doing this actually for a very long time. And I think it's part of why our American capital markets are so good. Investors. People watching this show or the big investors that maybe don't watch on Saturday

[Bloomberg Interviewer]

morning, I hope they will.

[Gary Gensler]

They get that information on a quarterly basis and so it's more timely. And what studies, economic study after economic study has shown that that's a good thing, that creates a market environment where you can get a little higher price earnings ratio and a little less cost of capital because your investor base knows what's going on.

[Bloomberg Interviewer]

What do you say to the CEOs who complain that this is onerous and too much of their life is taken up having to prepare for these earnings releases and earnings calls?

[Bloomberg Host]

Is that who's pushing for this? That's my question.

[Gary Gensler]

Yeah, you know, it's really interesting, like who really is looking for this in President Trump's first term, which we'll call Trump 45. He also called for this and his then SEC chair, Jay Clayton, did some public roundtables, put out what's called a concept release, and then didn't do it. And I think maybe the president, even though I think he still likes Jay

[Bloomberg Interviewer]

Clayton, he might have attorney here in New York.

[Gary Gensler]

He is, he is. But he may have felt a little slow, walked that. And Trump 47 has come back. And so it's I think the president really wants it, but I really don't think the capital markets want it.

[Bloomberg Host]

Does this make insider trading and malfeasance easier to conceal? If you don't have to report quite

[Gary Gensler]

as regularly, it's just a little bit easier. I want to caution, like every six months putting out information means that our, our markets will be a little bit more volatile. Those earnings releases. And this is a voluntary system. So it's interesting what the SEC is saying. They're saying we just want to make flexibility the root of all of this. And there's a great study in the 1960s, the individual went on to get a Nobel Prize. George Akaloff, who is Janet Yellen's husband.

[Bloomberg Interviewer]

Husband, yes, yes.

[Gary Gensler]

And George wrote about the problem with lemons, and he was talking about the used car market and he said the problem is if you don't have enough information, you don't know which cars are the lemons. And thus it lowers the pricing of even the good cars. And so put that in the stock market. If you let it be flexible, the lemons might not report, but you don't know who the lemons are. And so it might lower the valuation in the overall markets.

[Bloomberg Interviewer]

Interesting question about the mechanics of this. So we have this proposal 60 day period in which the public can comment. You've lived through many of these, both at the CFTC and the sec. What happens at the end of that comment period? Where are we in this process?

[Gary Gensler]

Well, the staff pulls together all the comments, puts together a lot of things for the commissioners. There's only three Republican commissioners now and makes a recommendation, generally speaking, from this time to finalizing a rule takes anywhere from 18 to, I'd say 30 months. But with the clock ticking on the Trump administration, this agency might decide to move forward within that timeframe. I think it's up to investors, I think it's up to listeners of this program to say small investors, large investors, academics, news organizations say no, quarterly reporting is what we need. And then really the key is do some companies, some issuers say, you know, we should do this anyway. You know, before the SEC actually made it mandatory in 1970, the New York Stock Exchange in 1926 said we should move to quarterly reporting. This is 100 year ago thing. And by the early 1950s, 90% of companies were doing it.

[Bloomberg Host]

But to all the points you just made, is this a fait accompli or do you think there's room for them to change their mind on this decision?

[Gary Gensler]

I think there's a public comment period and it really is important whether it's the media and especially large companies, investors and so forth, who might get in the ear of this White House.

[Bloomberg Interviewer]

Another question about disclosures. And we're going to watch you deftly dodge the question that I put to you here.

[Gary Gensler]

But I'm going to give it a shot.

[Bloomberg Host]

We had, hey, I'm going to get comfortable.

[Bloomberg Interviewer]

We have Elon Musk agreeing to a $1.5 million settlement with the SEC over the fact that he didn't disclose the position that he'd taken in Twitter before he bought the company in a timely fashion. That now goes before a judge this week, which I gather is customary. A judge can say, I want to hear out the reasons for coming to this settlement. Your reaction to that? I should say you were at the SEC when this issue came about.

[Gary Gensler]

Well. And you wanted me to get up and dance because, look, I ran a civil law enforcement agency, so I can't comment on any individual thing that we worked on. But it's about transparency. And Congress in the 1960s came together. There was a Senator Williams from New Jersey, the Williams act, and said, we need disclosure about when somebody's accumulating shares in a company. If you accumulate over 5%, which Mr. Musk did, then you need to report to the public that you have some intent to control. And I'm proud that when I was chair of the SEC, we shortened that time period from 10 days to five days because that's really material, non public information that there's somebody accumulating. And what happens generally when it's announced, the stock pops. And so Christina talked about insider trading. What happens in those five days until it's announced and who knows about it? Which lawyers know about it? What insiders? Not insiders in the company now, insiders in the acquirer. So that's a really important thing. This is not just a small little traffic violation. That transparency in the markets really helps the public.

[Bloomberg Host]

But how is the enforcement of that? Is it robust or is it, is it hard to enforce a lot of these rules? This one in particular?

[Gary Gensler]

Well, it first comes from a little backbone from the administration. The cop on the beat matters. And if the cop on the beat, like enforce and says, and the law on this is not an intent law, it's a, it's what lawyers call per se. It's just like you've gone too long, that's a violation. I don't know. It's just sort of straightforward stuff.

[Bloomberg Interviewer]

I want to pivot to the summit that's coming up this week. President Trump going to Beijing to meet with President Xi, we were talking with Ambassador Burns about the work that he did laying the groundwork for the three summits that President Biden had with the Chinese president. You also were involved in these issues when you were at the sec. We have seen over the last few weeks the Chinese administration really pushing back on foreign investment in Chinese tech companies in particular. Would love to get your sense of where things stand. They have been so reliant on Western capital for. For so long now. Is it worrisome, should it be worrisome to capital markets now that we see this kind of prohibition in place by it by the Chinese government?

[Gary Gensler]

I did work closely with Nick and we worked with the Chinese and we successfully got the Chinese to agree that they're companies here in the U.S. the Chinese companies in the U.S. would comply with our laws. And for 20 years previously, folks, weren't successful. So thank you, Nick Burns. We were proud to do that as well. And I think that was good. That's good for the US Capital markets that we kept those companies here because we're like half the world's capital markets. And back to our earlier point, I don't want to adopt the European approach that that capital markets has semiannual reporting. It's not as good. But in terms of what's happening this week, for those of you who don't want to listen to Simon and Johnson and I do have an episode coming out Monday on China.

[Bloomberg Interviewer]

Shameless tease. I like that.

[Gary Gensler]

Yeah, yeah, Shameless tease on power and consequences. But my thought is. Is on the table is the Chinese do want to get a little bit loosening on Taiwan. Nick talked about that the president wants to have some deliverables and announceables maybe on soybeans and. And other things for it's an election year for the farm belt. And then business community wants a sort of a lowering of the tension on trade and tariffs. And there will be real questions. Will the president give President Xi something on Taiwan? They're already holding up a military sale of about $11 billion. And Nick would like to have that continue. But it would be really interesting what happens there. And I think China is stronger today than they were 18 months ago. I think the war in Iran has strengthened China and China now seems like, well, there may be an alternative to the US now how that plays out in the capital markets. Of course, if they don't settle things down this week or kick the ball down the field, which I think that's what President Trump wants to do electorally, kick the ball down the field, then capital markets might fall off.

[Bloomberg Host]

We're short on time. Before I let you go, I do want to ask you about oil, which you talked about almost the whole time you were here last year. Last time. So we only have one oil question. But you know we saw Brent crude plunge nearly $10 a barrel early on Wednesday after you had this report that the US and Iran were nearing an agreement. And about an hour before that was published, traders exchanged 700 million in oil futures, raising suspicions of possible insider information. The reporter for Axios, Barack Ravid, of course, is the of one forcefully denying those allegations. Why is this something the government is watching so closely?

[Gary Gensler]

Well, look, there's a real challenge around protecting markets, the integrity of markets against insider trading. And over and over again we've seen this year these happenings where somebody gets into a market, maybe they're going into polymarket or Kalshi. Yeah, but here sometimes it's even going into the oil futures markets. I think the oil futures markets are better supervised than the cow. She's in poly market. And so that's going to have to play out. I definitely think that Congress should pass some laws that the government actors can't trade in these prediction markets.

[Bloomberg Interviewer]

Gary Gensler, great to see you. Thank you for coming in. The podcast is Power and Consequences. He co hosts it with Simon Johnson, the Nobel laureate also at mit. Gary Gensler, he both at MIT as professors, appreciate your time, appreciate the around the world tour that we got there for free.

[Gary Gensler]

Thank you so much.

[Bloomberg Host]

Thanks Gary. That was great.

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