Former Securities and Exchange Commission (SEC) Chairman Gary Gensler wiped his government cellphone of official text messages even as he oversaw a wide-reaching, years-long probe into Wall Street for deleted text messages, according to a new watchdog report.
As former President Joe Biden’s top financial regulator, Gensler oversaw a sweeping crackdown of the concealment of “off-channel” communications like text messages. The investigation charged major banks, financial firms and credit rating agencies with improperly deleting text messages and other records, resulting in $2 billion in penalties. The SEC argued that preserving records is important to protect everyday investors. But Gensler’s SEC was concealing a massive double standard, a new SEC Office of the Inspector General report finds.
In September 2023 — in the midst of the “off-channel” probe — SEC IT staff performed a factory reset of Gensler’s phone, wiping nearly a year’s worth of text messages.
President Donald Trump’s SEC Chairman Paul Atkins told staff they should ensure such deletions never happen again, a commission spokesperson told the DCNF.
“When Chairman Atkins was briefed on this matter, he immediately directed staff to examine and fully understand what occurred and to take steps that will prevent it from happening again,” an SEC spokesperson told the DCNF. “Transparency is paramount. Taxpayers and those regulated by the Commission must have full confidence in our work.”
SEC IT staff reset Gensler’s phone because of technical problems. These problems were caused by a policy adopted by the commission in the summer of 2023 to remove software from government phones if they do not communicate with the mobile device management system for at least 45 days, assuming such devices must be unused, lost or stolen, per the report. That same summer, Gensler’s government phone did not communicate with that system for 62 days.
The SEC IT staff returned the phone to a vendor before the text messages could be recovered, the watchdog found. The SEC recovered some data from other SEC employees but was unable to recover or determine the entire universe of missing text messages, the report states.
The SEC determined that more than a third of recovered texts were substantive and mission-related and thus qualified as federal records that Gensler should have, by law, retained. For instance, deleted texts recovered by the SEC included conversations about a meeting with the White House as well as conversations between Gensler and the Division of Enforcement about filing charges against crypto asset trading platforms and a leading global financial services firm.
This discovery suggests that the unrecovered deleted texts also included improperly destroyed federal records, the watchdog wrote.
The SEC’s Office of the Chief Operating Officer did not inform the SEC office responsible for handling requests for federal records from reporters and the public under the Freedom of Information Act until seven months after the texts were erased, the report said.
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