House Republicans have launched an investigation into the Securities and Exchange Commission (SEC), alleging that the agency may be engaging in politically motivated hiring practices.
House Republicans have launched an investigation into the Securities and Exchange Commission (SEC), alleging that the agency may be engaging in politically motivated hiring practices.
The probe, spearheaded by GOP representatives Jim Jordan, Patrick McHenry, and James Comer, targets SEC Chair Gary Gensler, a Democrat, and questions the agency's adherence to federal law in its recruitment processes.
The allegations suggest that Gensler has been favoring candidates from left-leaning organizations for senior positions. The lawmakers point to emails made public in an SEC rulemaking comment. They allege that Gensler's decision to hire Dr. Haoxiang Zhu as the agency's director of trading and markets may have been influenced by political considerations.
According to the letter, emails from May 2021 show that Zhu informed Gensler he was "in the right place on the political spectrum." Six months later, on November 19, 2021, Zhu was appointed to his current position.
"If these allegations are true, the SEC is violating the Civil Service Reform Act to fill the agency with employees who possess a particular ideology, which undermines the SEC's purported impartiality," the letter states.
The House Republicans have demanded that Gensler provide all relevant documents and communications dating from April 17, 2021, regarding the SEC's hiring and staffing decisions. They are also seeking information on how the agency evaluates applicants' political affiliations or ideologies.
The former MIT blockchain professor is known for his strict scrutiny, and purportedly shifting enforcement, over the US crypto industry. As SEC chair, he set a record-high of 46 enforcement actions against crypto firms in 2023.
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