U.S. House Committee on Financial Services presses SEC Chair Atkins over loss of nearly a year of former Chair Gary Gensler’s texts

The U.S. House Committee on Financial Services leadership sent a letter to Securities and Exchange Commission Chair Paul Atkins raising concerns about SEC Office of Information Technology failures that led to the loss of nearly a year of former Chair Gary Gensler’s text messages. The lawmakers pointed to shortcomings in oversight and recordkeeping, questioned whether special treatment was afforded to the former Chair, and called for further investigation to ensure accountability and transparency. The letter cites the SEC Office of Inspector General’s report finding that Gensler’s smartphone stopped communicating with the SEC’s mobile device management system on July 6, 2023 and was deemed “inactive” for 62 days despite functioning normally, with repeated flags not investigated by IT staff. After the SEC introduced a policy on August 10, 2023 to remotely wipe devices that did not communicate with the system for at least 45 days, Gensler’s phone was not wiped until September 6, 2023; staff then performed a factory reset that permanently deleted device data, with the OIG attributing the loss in part to the device not having been backed up since October 18, 2022. The lawmakers also highlighted the SEC’s enforcement posture on recordkeeping, noting that in fiscal year 2023 it collected more than USD 400 million to settle charges that 25 advisory firms, broker-dealers, and credit rating agencies violated federal securities law recordkeeping requirements, while the SEC ultimately reported it could not determine the entire universe of federal records potentially implicated by the lost texts. The Committee said it is engaging with the Office of Inspector General to seek clarity on outstanding questions and identify additional areas requiring oversight and investigation, and it asked for the Commission’s engagement and transparency during that process.