Republicans Scrutinise SEC Hiring Practices Under Gensler

In recent developments, United States House Republicans have raised concerns about hiring practices at the Securities and Exchange Commission (SEC), accusing Chair Gary Gensler of allowing political bias to influence recruitment.

Republicans on SEC hiring charges

In a letter dated Sept. 10, GOP lawmakers claim that the SEC may have violated federal law by hiring employees based on their political affiliation. This accusation is focused on the hiring of Dr Haoxiang Zhu, the SEC’s director of trading and markets, which Republicans suggest could have been politically motivated.

The letter highlights a 2021 email exchange between Zhu and Gensler, suggesting that Zhu’s political alignment may have played a role in his appointment six months later. The correspondence reportedly shows Zhu stating he was “in the right place on the political spectrum.”

A highlighted excerpt of the letter to Gensler claims evidence of a politically influenced hiring. Source: US Congress

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Gensler may be responsible for SEC hiring violations

The lawmakers have demanded that Gensler produce records of all hiring and staffing communications at the SEC from April 2021 onwards, focusing on roles such as directors, associate directors, and Gensler’s own staff.

If the allegations hold, this could represent a violation of the Civil Service Reform Act, which is designed to prevent political considerations in federal employment.

Gensler’s term has seen a notable rise in enforcement actions against cryptocurrency firms, with 2023 seeing double the enforcement actions compared to 2021. This aggressive regulatory approach has drawn both praise and criticism.

Former President Donald Trump has indicated his intention to remove Gensler if he wins the 2024 election. Historically, SEC chairs often step down when the White House changes administration.

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