Officials from the Securities and Exchange Commission fear DOGE is exercising outsized power as they negotiate new regulations surrounding blank-check companies.
According to Reuters, DOGE officials are now urging staff at the SEC to relax policies surrounding special-purpose acquisition companies.
Sometimes known as a “blank-check company,” a special-purpose acquisition company, or SPAC, is a shell company created to raise funds so its founder can acquire a private company, allowing them to take the private company public with fewer regulations. However, doing so also creates greater risks for investors, which the SEC policies surrounding SPACs were intended to mitigate.
While SEC officials were already negotiating to change the regulations, anonymous staffers told Reuters they’re concerned about DOGE’s presence in these discussions.
The SEC adopted new policies for regulating SPACs in the final months of the Biden Administration last year, requiring the companies to take on greater legal liability and disclose more data to allow the agency to better assess potential financial risks.
The new regulations were unpopular among conservatives, who feared they were too restrictive. Just two weeks ago, the agency made a last-minute decision to delay implementing Biden’s regulations amid negotiations with officials from the Nasdaq and the New York Stock Exchange to relax the rules.
Still, DOGE’s influence at the SEC has concerned some staffers, who spoke anonymously to Reuters and fear the government may be overstepping its bounds when it comes to regulating the SEC’s operations. In theory, as an independent government agency, the SEC should have final rule-making authority when it comes to regulations of this kind.
DOGE’s reported push to relax SEC policies follows a February executive order from President Donald Trump instructing the agency to seek out government regulations that “impose undue burdens on small business[es] and impede private enterprise and entrepreneurship.”
More broadly, the move is also part of Elon Musk’s larger philosophy behind DOGE: stimulating economic growth by slashing regulatory bodies.
President Trump has also moved to restrict the autonomy of traditionally independent government agencies since the start of his second term.
In another February executive order, the president gave himself the power to interfere with several agencies’ budgets and the regulations they issue. Included in the order were the SEC, the Federal Elections Commission, and the National Labor Relations Board.
The president’s social media platform, Truth Social, was taken public via a SPAC. Reuters previously reported that officials from the Trump Media and Technology Group, which runs Truth Social, may be considering another SPAC acquisition related to cryptocurrency.
A spokesperson from the SEC told Reuters that the agency was “working with DOGE to find cost efficiencies and ensure public funds are being used as effectively as possible.”
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