US Republican Lawmakers Investigate SEC’s Gary Gensler On Claims of Politically-Motivated Hiring

Three Republican lawmakers have demanded that Securities and Exchanges Commission (SEC) chairman Gary Gensler disclose information regarding the commission's hiring process.

The lawmakers claimed they've obtained evidence that the agency hires personnel based on political affiliation.

These allegations, if true, mean the SEC violated the Civil Service Reform Act.

SEC Hiring Allegedly Political Ideology-Driven

Recently, three GOP lawmakers, Patrick McHenry, Jim Jordan, and James Comer, wrote a letter to Gensler, accusing the SEC of hiring people of a particular political ideology.

The letter explicitly claims that the SEC employs individuals from left-leaning organizations" to occupy senior roles.

The House Republicans cited an email correspondence unveiled in an SEC rulemaking comment as proof. According to the letter, the email shows Gensler's decision to employ Dr. Haoxiang Zhu as the SEC's director of trading and markets may be due to his political affiliation.

Furthermore, the letter highlighted that emails from May 2021 suggest that Zhu said he was in the right place on the political spectrum." Six months after this email correspondence, the SEC hired Zhu on November 19, 2021.

According to the letter, this email correspondence suggests that the SEC might consider applicants' political ideology when hiring bureaucrats.

The lawmakers further mentioned in the letter, If the allegations are true, the SEC is violating the Civil Service Reform Act to fill the agency with employees who possess a particular ideology." According to the letter, such a hiring process undermines the agency's touted impartiality.

Consequently, Gensler must share all documents and communications related to SEC hiring and staffing decisions on director, associate director, and other senior roles.

Also, Gensler must disclose information regarding how the SEC evaluates applicants' political affiliations or ideology. He has until 5:00 pm on September 24 to submit the information to the House Judiciary Committee, chaired by Jim Jordan.

Meanwhile, the SEC or its chairman, Gensler, has yet to comment on this development.

Gary Gensler Will Vacate the SEC Chairmanship Position Soon

The SEC's crypto enforcement actions have heightened since Gary Gensler assumed office as the agency's chairman. These enforcement actions reached a 10-year high in 2023, with around 46 against crypto firms, marking a two-fold increase from 2021.

Several industry figureheads have complained about Gensler's hostility towards crypto, blaming the Biden Administration for enabling him.

They believe the present administration is using Gensler to enforce their hostile approach to crypto regulation.

President Joe Biden appointed Gensler as SEC chairman. Since SEC chairs reportedly often resign upon an administrative change in the White House, many believe Gensler's tenure might end soon.

Moreover, Republican flagbearer and former president Donald Trump has pledged to fire Gensler if he wins the upcoming election.

Former Democratic Re of Ohio Tim Ryan told MarketWatch that Gensler will be gone soon.

Gensler will be gone in a year or two, and these members of Congress charged with the Constitutional obligation to set the country's direction for the next decade or two," he said.

Gensler's tenure as SEC chair is expected to end in June 2026.

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