Top House Republicans derided Securities and Exchange Commission Chairman Gary Gensler for inconsistency and hypocrisy with record-keeping laws.
“Recent reports suggest the SEC, under your leadership, is … failing to comply with federal record-keeping statutes. In particular, evidence uncovered during Freedom of Information Act (FOIA) litigation suggests the SEC is failing to identify and produce records of official business conducted on non-email or ‘off-channel’ platforms, such as Signal, WhatsApp, Teams, and Zoom — regardless of whether the communication took place on a personal or business device,” the lawmakers wrote Tuesday.
“As recounted by a FOIA litigator, the SEC is hiding its ‘off-channel’ communications with environmental activists, even though the communications qualify as federal records.”
The Republicans accused the SEC of failing to comply with federal transparency laws while aggressively enforcing record-keeping laws on private businesses.
“The SEC recently charged 16 firms more than $1.1 billion combined for allegedly failing to maintain and preserve electronic communications,” they wrote.
On Sept. 27 the SEC announced settlements and combined penalties of over $1.1 billion related to charges against 15 broker-dealers and one affiliated investment firm for failure by their personnel to maintain and preserve written electronic communications on personal text messages and other text messaging platforms.
SEE ALSO: Biden announces $13.5 billion in assistance to reduce home energy costs
The lawmakers noted that the SEC, in a commission press release when it announced penalties against private sector business, “ironically” emphasized the importance of transparency.
“Finance, ultimately, depends on trust. By failing to honor their record-keeping and books-and-records obligations, the market participants we have charged today have failed to maintain that trust,” the SEC press release stated.
The GOP lawmakers called for answers from the SEC chairman by Nov. 15.
The lawmakers want the commission to certify that the SEC is following federal record-keeping and transparency requirements and confirm that officials at the SEC never used a private email account or “off-channel communications” for official SEC business.
The lawmakers also want Mr. Gensler to explain how the SEC defines “off-channel communications” for purposes of responding to FOIA requests and other federal transparency requirements.
The letter was signed by the Judiciary Committee’s Jim Jordan of Ohio, the Oversight and Reform Committee’s James Comer of Kentucky, the Financial Services Committee’s Patrick McHenry of North Carolina and the Financial Services Subcommittee on Oversight and Investigations’ Tom Emmer of Minnesota, all ranking members.
“This is yet another example of Chair Gensler’s hypocritical mismanagement of the SEC. Chair Gensler is aggressively pursuing enforcement actions against companies who use off-channel communications while at the same time reportedly failing to comply with federal record-keeping laws,” Mr. McHenry said in a statement.
The Washington Times reached out to Mr. Gensler’s office for comment and did not immediately hear back.
• Kerry Picket can be reached at kpicket@washingtontimes.com.
Please read our comment policy before commenting.