US Congress resubmits letter to SEC chief on record keeping

Garry Gensler-min
Garry Gensler-min

The chairmen of three committees of the US House of Representatives sent a letter to the head SEC Gary Gensler requesting a satisfactory response to their letter dated November 1, 2022 regarding the maintenance of the agency’s internal records.

Judiciary Committee Chairman Jim Jordan, Oversight Committee Chairman James Comer and Financial Services Committee Chairman Patrick McHenry said the information previously provided by Gensler was not specific.

In particular, Congressmen requested confirmation that the SEC complies with federal record keeping and transparency rules, and that Gensler and his subordinates do not use personal email in official activities.

In addition, the Commission was asked to provide clarification on the use of “out-of-channel communications”. The letter also mentions inconsistencies in Gensler’s public meeting schedules for 2021, including those related to cryptocurrencies.

The appeal was a response to a Wall Street Journal article about poor record keeping by the SEC. Among other things, it was reported that officials use chat rooms in the civil service, which are not checked when sending requests to comply with the Freedom of Information Act.

In the new letter, Congressmen, in addition to the original requirements, ordered Gensler to explain “the factual and legal basis for this” in the event of refusal to provide information.

At the same time, the head of the SEC became the object of criticism from the Blockchain Association. The organization said that Gensler should independently step back from making any enforcement decisions regarding digital assets.

“In the digital asset space, the SEC has all but abandoned its role as a rule-making body. Key issues regarding the digital asset industry remain unresolved,” the Blockchain Association said in a statement.

Referring to numerous speeches by the head of the Commission, representatives of the organization indicated that Gensler “clearly” classified all digital assets with the exception of bitcoin as unregistered securities, and crypto platforms as unregistered securities exchanges.

“Due process requires not only that decision makers act with impartiality, but also avoid even the appearance of bias,” the Blockchain Association added.

All recipients of the SEC notices were advised by experts to seek the removal of Gensler through the Commission or federal court.

Recall that in mid-June, US congressmen submitted a bill to dismiss Gary Gensler and restructure the SEC due to “continued abuses” of the head of department.

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