Former Securities and Exchange Commission Chairman Gary Gensler lost almost a year of texting after automated IT action, federal review found.
According to a special review by the SEC Inspector’s Office, information technology staff triggered an automated “enterprise wipe” that erases text messages sent and received on Gary Gensler’s government phones from October 18, 2022 to September 6, 2023.
This review states that the device was not backed up during that interval and that routine alerts and change controls were either missed or ignored.
Gary Gensler & The Missing Text: Inspector’s findings
The OIG report discovered wipes due to the lack of automated policies introduced by the SEC’s Information Technology Bureau in August 2023.
Based on reviews, wipes were avoidable and exacerbated by weak change management, failures acting on vendor software defects, and lack of timely backups. Key messages are incomplete gaps. The report lists recommendations and said agency management responded with corrective action.
Source: US House of Representatives Committee on Financial Services
Legislators look at double standards
House Republican leaders are asking the SEC for answers. Based on a report from the House Financial Services Committee, the Republican chair has written to SEC Chairman Paul Atkins for details on how the losses occurred, how the records were affected, and whether agency recordkeeping met federal law.
They say the SEC will win more than $400 million penalties related to corporate recordkeeping and off-channel communications in 2023, and the agency itself must meet the same standards that have been enforced by others.
Political and legal interests
The missing message overlaps with the enforcement action of a busy year and policy talks at the SEC. Reports say some deleted texts are related to enforcement work related to cryptography cases and other well-known issues.
Industrywide, critics point to Gary Gensler as accusations of the Biden administration campaign to fine-tune banks to limit services to crypto companies, and they accus the SEC under his watch of undermining the sector by filing several lawsuits.
What the agency said and what the following
SEC’s OIT and agency leadership acknowledges faults flagged by the OIG and explains the steps to modify system control and backup processes.
House committee letters require a full account and timeline and can be followed up by lawmakers with additional oversight or hearings.
For now, investigators and agency officials are focusing on closing the technical gaps identified by the report.
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