US SEC Chair Gary Gensler Faces Probe Over Illegal Hiring Claims

The US SEC Chair Gary Gensler faces a probe over hiring practices, sparking market discussions. The investigation, launched by the House Republicans, indicates that the agency may be breaking federal law by potentially factoring political leanings into its recruitment process, sparking concerns about impartiality in hiring practices.

House Republicans Probe US SEC Chair Gary Gensler

The House Republican lawmakers Jim Jordan, Patrick McHenry, and James Comer, question the hiring decisions of Gary Gensler in a September 10 letter. The lawmakers suspect that the agency may be favoring individuals with specific political leanings, potentially breaching the Civil Service Reform Act of 1978.

In the letter sent to the US SEC Chair, the lawmaker highlighted an email exchange that indicates that political ideology could have influenced the hiring of Dr. Haoxiang Zhu, SEC’s Director of Trading and Markets.

Meanwhile, the letter suggested that after a discussion about potential employment at the SEC, Dr. Zhu assured Gensler of his political alignment. The letter noted him stating, “I believe I’m in the right place on the political spectrum.”

The email, dated May 2021, raises red flags as Zhu was hired six months later, in November 2021. This correspondence is being used as evidence that Gensler might be unlawfully considering political ideology when making hiring decisions.

Meanwhile, the lawmakers argue that if these allegations hold, they would undermine the SEC’s duty to remain unbiased. In addition, they also noted a trend of hiring from left-leaning organizations for senior roles, further suggesting a pattern of ideologically motivated recruitment. The investigation aims to determine whether Gensler’s leadership has compromised the SEC’s neutrality.

Crypto Market Keeping Close Track

Gary Gensler has been given a deadline of September 24 to provide crucial documents on the SEC’s recent hiring practices. The House Committees have also requested all communications and records related to hiring decisions for senior roles in the agency. In other words, the committee is seeking evidence of whether political ideologies influenced the hiring choices.

Meanwhile, this investigation comes amid growing scrutiny of the SEC Chair’s tenure, marked by aggressive enforcement actions against crypto firms. In recent years, the agency’s enforcement actions have significantly increased, drawing criticism from market participants who accuse the SEC Chair of overreach.

Meanwhile, the outcome of the probe could have far-reaching consequences. Gensler, appointed by President Joe Biden, faces increasing opposition. For context, former President Donald Trump vows to remove him if he wins the upcoming presidential election.

On the other hand, it appears that this latest development has also caught the eyes of crypto market enthusiasts. A flurry of market watchers have voiced against the agency’s Chair, and now demanding his termination from the role.

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Rupam Roy

Rupam is a seasoned professional with three years of experience in the financial market, where he has developed a reputation as a meticulous research analyst and insightful journalist. He thrives on exploring the dynamic nuances of the financial landscape. Currently serving as a sub-editor at Coingape, Rupam’s expertise extends beyond conventional boundaries. His role involves breaking stories, analyzing AI-related developments, providing real-time updates on the crypto market, and presenting insightful economic news.
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