All five SEC Commissioners will testify before the House Committee for the first time since 2019, amidst scrutiny of the agency.
SEC Chair Gary Gensler faces allegations of violating federal law by considering political affiliations in hiring practices.
Former SEC officials will testify on crypto regulation; the debate over Ethereum's status as a security may resurface.
The five sitting members of the U.S. Securities and Exchange Commission will appear before the House Financial Services Committee next week. This is the first time since 2019, the entire Commission will appear.
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The session takes place as SEC Chair Gary Gensler is under fire for resorting to illegal hiring practices. He will take the stand separately next Wednesday.
SEC Chair Hiring Practices Under Investigation
It is alleged that Gary Gensler engaged in unlawful discrimination during hiring. He allegedly targeted political orientations of the candidates during hiring. This could infringe the Civil Service Reform Act of 1978.
As a result, Gensler will be in serious trouble, including disqualification from the current office. The case has raised concerns of reputational damage to the agency and also added doubts to its impartiality.
Testimonies from Former SEC Officials
Furthermore, Dan Gallagher and Michael Liftik, both former officials of the SEC, are expected to testify. Gallagher is now the Chief Legal Officer of Robinhood Markets having worked previously as an SEC Commissioner from 2011 to 2015.
Liftik is a partner at Quinn Emanuel Urquhart & Sullivan, LLP and was Deputy Chief of Staff. Their testimonies are anticipated to provide some new dimensions regarding the SEC's stance on regulation of cryptocurrencies.
Ongoing Debate Over Ethereum's Status
Moreover, analysts are watching to see if the debate over Ethereum's status as a security will resurface. Crypto lawyer MetaLawMan noted the significance of having all five Commissioners present.
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He speculated that Committee Chair Patrick McHenry might question Gensler on this issue. Besides, some observers believe SEC Commissioner Hester Peirce may use this opportunity to position herself for a future leadership role.
These hearings follow recent reports of alleged favoritism in the SEC's hiring process. This has raised concerns about the agency’s compliance with federal hiring regulations. Consequently, the testimonies may provide crucial insights into the SEC's regulatory approach, especially in the cryptocurrency market.
The upcoming testimonies will address key issues, from hiring violations to crypto regulation. Hence, the hearings could have significant implications for the SEC's future policies and leadership.
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