Six U.S. senators have questioned the Securities and Exchange Commission (SEC) why its staff is quitting at a record pace. “Efforts to ram through hurried rulemaking without proper analysis, deliberation or consideration of downstream negative impacts is nothing short of regulatory malpractice,” the lawmakers told SEC Chair Gary Gensler.
SEC Staff Leaving at Record Pace
Six U.S. senators have reportedly sent a letter to the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, inquiring why the securities watchdog’s employees are quitting at a record rate.
The private letter, dated Oct. 27, was signed by senators Thom Tillis (R-NC), Mike Crapo (R-ID), Tim Scott (R-SC), Michael Rounds (R-SD), Bill Hagerty (R-TN), and Steve Daines (R-MT), Reuters reported, noting that it has seen the letter. The Republican senators want the SEC to explain why its staff is leaving the agency at the highest pace in 10 years.
The lawmakers referenced a public report published on Oct. 13 by the Office of the Inspector General, the SEC’s own internal watchdog, detailing staff attrition and reports of discontent. The SEC employees interviewed for the report said they received little feedback on rules they had written, emphasizing their fear of an increased litigation due to shortened industry comment periods.
The senators want Gensler to explain how he plans to address the concerns raised in the report and to allow more time for industry feedback on new rules.
The letter stresses:
Efforts to ram through hurried rulemaking without proper analysis, deliberation or consideration of downstream negative impacts is nothing short of regulatory malpractice.
The letter notes that the securities regulator has introduced 26 new rule proposals this year, more than double the number in 2021 and the highest total of any year in the last five years.
Many people have accused SEC Chair Gensler of overstepping his authority and taking a hostile approach to regulating the financial industry.
He has been repeatedly criticized for taking an enforcement-centric approach to regulating the crypto industry. U.S. Representative Tom Emmer (R-MN) recently accused the SEC of not regulating in good faith. “Under Chair Gensler, the SEC has become a power-hungry regulator, politicizing enforcement, baiting companies to ‘come in and talk’ to the Commission, then hitting them with enforcement actions, discouraging good-faith cooperation,” said the congressman. Gensler believes that most crypto tokens are securities.
Last week, several U.S. lawmakers sent a letter to Gensler inquiring about the revolving door between the securities regulator and the crypto industry. According to the Tech Transparency Project, 28 SEC officials have moved between public service and crypto firms.
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