YEREVAN (CoinChapter.com) — Gary Gensler, Chair of the U.S. Securities and Exchange Commission (SEC), is facing allegations of political favoritism in the hiring of senior officials. According to a letter from the House Judiciary Committee, the House Financial Services Committee, and the Oversight and Accountability Committee, the SEC may have unlawfully considered political ideology when making key appointments.
At the center of this controversy is the hiring of Dr. Haoxiang Zhu as SEC Director of Trading and Markets. Dr. Zhu reportedly assured Gensler of his political alignment in a message before being hired in November 2021. He wrote,
“I believe I’m in the right place on the political spectrum, and I’m happy [to] provide as many details as needed so you feel comfortable.”
Haoxiang Zhu’s Email to Gary Gensler. Source: SEC.gov
Lawmakers argue that this exchange suggests a violation of the Civil Service Reform Act of 1978, which prohibits discrimination based on political affiliation.
Congress Demands SEC Hiring Records in Probe Over Alleged Political Bias
The letter, signed by Judiciary Committee Chairman Jim Jordan, Financial Services Committee Chairman Patrick McHenry, and Oversight Committee Chairman James Comer, raises concerns about the SEC’s compliance with federal law. The committees are now seeking documents related to the hiring of directors, associate directors, and other staff in Gensler’s office since April 2021.
Congress Letter to Gary Gensler. Source: judiciary.house.gov
Lawmakers have given the SEC a deadline of September 24, 2024, to submit these documents. They are investigating whether political ideology influenced other hiring decisions. The committee members stress that hiring people from left-leaning organizations for senior roles raises their concerns even further.
Ripple CEO Predicts Gensler’s Exit Amid Political and Industry Pressure
This investigation comes amid broader criticisms of Gary Gensler’s leadership at the SEC, particularly from the cryptocurrency industry. At Korea Blockchain Week 2024, Ripple CEO Brad Garlinghouse predicted Gensler’s exit from the SEC, regardless of the outcome of the 2024 presidential election. Garlinghouse stated,
“I would make a gentleman’s bet that Gensler’s tenure would not continue, no matter who takes the White House.”
Moreover, the controversy over political favoritism is adding to Gensler’s challenges. The SEC continues its enforcement actions against the cryptocurrency industry and other sectors. Lawmakers and industry leaders are increasing the pressure on Gensler. As a result, his future at the agency is now in question.
Congress Probes SEC for Potential Political Bias in Hiring Under Gary Gensler’s Leadership
Additionally, as part of the investigation, Congress is also looking into whether political favoritism has influenced other decisions within the SEC. The committees argue that the hiring process for civil servants must be free from political bias, in line with federal law. They are urging Gary Gensler to provide full transparency about the hiring practices under his leadership.
Above all, the outcome of this investigation could have significant implications for the SEC, as lawmakers push for greater accountability within the agency. As Gensler’s leadership comes under increasing scrutiny, this probe will continue to draw attention in the coming months.
The post Gary Gensler Faces Allegations of Political Favoritism in SEC Hiring Practices appeared first on CoinChapter.