Former Securities And Exchange Commission Chair Gary Gensler lost nearly a year of text messages after an automated IT action, a federal review found.
The review says the device had not been backed up during that interval, and routine alerts and change controls were missed or ignored.
Based on the review, the wipe was avoidable and was compounded by weak change management, failures to act on vendor software flaws, and a lack of timely backups — gaps that left key messages unrecoverable. The report lists recommendations and said agency management has responded with corrective steps.
House Republican leaders are pressing the SEC for answers. Based on reports from the House Financial Services Committee, Republican chairmen have written to SEC Chair Paul Atkins seeking details about how the loss happened, what records were affected, and whether the agency’s recordkeeping met federal law.
They point out that in fiscal year 2023 the SEC obtained more than $400 million in penalties tied to recordkeeping and off-channel communications by firms, and say the agency itself must meet the same standard it enforced on others.
Across the industry, critics point to Gary Gensler as instrumental in an alleged Biden administration campaign to nudge banks into restricting services to crypto companies, and they charge that the SEC under his watch weakened the sector by bringing several lawsuits.
The SEC’s OIT and agency leadership have acknowledged the failures flagged by the OIG and have described steps to fix system controls and backup processes.
The House committee’s letter asks for a full account and timelines, and signals lawmakers may follow up with additional oversight or hearings.
For now, investigators and agency officials are focused on closing the technical gaps the report identified.
Featured image from Getty Images, chart from TradingView
