SEC leaders with nearly 50 years' experience quit under Gary Gensler's tenure
More than a dozen staff attorneys have also left the agency, internal SEC sources tell FOX Business
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How tough of a boss is Wall Street’s top cop, Gary Gensler? So tough that more and more people are walking out on him.
Fox Business has learned from internal SEC sources that more than a dozen staff attorneys in the agency’s Division of Enforcement have bolted since Gensler’s appointment last year.
Latest to hit the exit are three senior officials with nearly 50 years collective tenure at the agency: Kristina Littman, head of the Crypto Assets and Cyber Unit who spent nearly 12 years at the SEC; Jennifer Leete, associate director in the Division of Enforcement who was with the agency for 23 years; and Adam Aderton, co-chief of the Division of Enforcement’s Asset Management Unit, a 14-year SEC veteran.
The U.S. Securities and Exchange Commission (SEC) said on Friday that it would delay enforcement of certain assets from a new disclosure rule for off-exchange securities until Jan. 3, 2022. Photographer: Andrew Harrer/Bloomberg via Getty Images (Photographer: Andrew Harrer/Bloomberg / Getty Images)
Wall Street lawyers who have served at the agency say turnover is almost unprecedented at the commission, known as a blue chip government regulator where people work on high profile matters in a collegial atmosphere.
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While SEC officials leverage their knowledge of regulation and seek legal work in the private sector, the agency usually holds a solid retention rate and is able to keep attracting talented people — something that appears to be changing under Gensler.
"There is always some turnover with a change in administrations but the loss of so much experience in such a short time is unusual and bound to hamper the agency’s enforcement efforts at a time when Gensler wants to be seen as tough," an SEC enforcement veteran tells FOX Business.
Gary Gensler, chair of the Securities and Exchange Commission(SEC), testifies during the Senate Banking, Housing, and Urban Affairs Committee hearing on "Oversight of the US Securities and Exchange Commission" on September 14, 2021, in Washington, D. ((Photo by BILL CLARK/POOL/AFP via Getty Images) / Getty Images)
The problem with working for Gensler, multiple SEC sources tell Fox Business, is both style and substance. People at the SEC are complaining about his expansive agenda — pushing the commission into new areas of enforcement such as crypto regulation and mandating new company disclosures on issues like the environment. That, combined with his brusque management style, has created a toxic work environment at the SEC, these people say.
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An SEC spokesman declined comment.
Gensler, whom President Biden appointed in February of last year, has commanded the SEC veer outside the agency’s core mission of protecting small investors from securities fraud. Since his confirmation in April 2021, he has proposed a wide array of progressive policies including more ESG (Environmental, Social and Corporate Governance) disclosures for public companies. He is looking for additional resources from Congress to regulate cryptocurrencies — normally an area outside the commission’s purview. He has also hinted at reforming equity market structure which could change the way trades are routed.
Gensler, 64, is not a lawyer but a former Goldman Sachs banker who then began serving in various governmental positions under Democratic presidents. President Obama appointed Gensler head of the Commodities Futures Trading Commission in 2009. Before becoming SEC chief, Gensler served as professor of practice of global economics and management at the MIT Sloan School of Management.
President Joe Biden and the White House COVID-19 Response Team participate in a virtual call with the National Governors Association from the South Court Auditorium of the Eisenhower Executive Office Building of the White House Complex on Monday, Dec (Kent Nishimura / Los Angeles Times via Getty Images / Getty Images)
Gensler is facing pressure not just from top agency officials but also from the SEC union that represents all of the agency’s non-management employees. At issue: Gensler’s edict forcing them to use or lose their vacation days.
Union leadership contends that their workload is too onerous to take a vacation and that they should be able to carry over the vacation days to the following year or get compensated for forfeiting the time.
Meanwhile, Gensler is said to be looking past his job as SEC chief to one day replace Janet Yellen as the Treasury secretary. SEC insiders tell FOX Business Gensler has stated privately that heading the SEC is not his "dream job."
Adding to the tension are Gensler’s constant appeals to Congress to provide the agency with more money, which is meeting opposition from Republicans.
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If Republicans take over the House and the Senate in the midterms, they are likely to target Gensler in hearings calling him out on the merits of his various proposals including a crackdown on crypto and questioning whether he should be pushing progressive ESG mandates onto public companies.