The Securities and Exchange Commission is looking to fill roles left vacant by the staff exodus in the early months of the Trump administration.
According to SEC Chair Paul Atkins’ testimony before the U.S. House Appropriations Subcommittee on Financial Services and General Government today, the number of employees at the SEC’s offices and divisions had dropped by 15% since the start of the fiscal year.
Atkins reported that at its peak headcount last year, the agency had about 5,000 employees and 2,000 contractors. That has dipped to 4,200 employees and 1,700 contractors (Atkins noted the agency had about 3,600 employees when he left his original role as commissioner in 2008).
According to Atkins, many employees at the commission opted to take early retirement and voluntary separation incentives, as well as the “Fork in the Road” buyout program initiated by the Trump administration. Others left to “pursue other opportunities, Atkins said.
“These departures leave vacancies that in many cases need to be filled,” Atkins told subcommittee members during a hearing Tuesday.
Elon Musk’s Department of Government Efficiency representatives have been working in the commission’s office as part of a broader administration effort to slash the headcount at federal agencies. Since the Trump administration took office in January, the commission’s legal and investment management divisions have been the hardest hit, according to Reuters.
During his testimony, Atkins also said the federal government informed the SEC it would end leases for its Los Angeles and Philadelphia regional offices (two of the commission’s 10 nationwide). Atkins said discussions between the U.S. Government’s General Services Administration were “ongoing,” and that the leases had not yet been terminated.
Reuters’ reporting indicated that the regional offices in San Francisco, Chicago and Denver had each suffered headcount losses of around 16%-17%. Still, Atkins said he believed in the need for regional offices and said the SEC should not solely reside in Washington and New York.
“Risk management, human resource development and practicality for our examination teams—as one example—provide ample reinforcement for the need to maintain these offices,” he said.
Other commissioners have expressed dismay about the staff cuts; during an Investment Adviser Association compliance conference in March, Commissioner Hester Peirce acknowledged imminent staff cuts and “some of those departures are going to be very hard” for both her and the agency.
During the Practicing Law Institute’s conference this week, Commissioner Caroline Crenshaw was more critical of the agency’s recent actions, saying it had been playing “a game of regulatory Jenga” and that the staff cuts were “the first, and perhaps most devastating, Jenga piece to go.”
“The industry’s success, in many ways, depends upon the agency maintaining a deep well of institutional knowledge,” she said. “Our well has taken a substantial and sudden hit.”
The SEC declined requests to comment on questions about what and how many roles would need to be refilled, or on whether the loss in headcount may increase further.
Corey Frayer, the director of investor protection for the Consumer Federation of America (and a former senior policy advisor for Chair Gary Gensler under Joe Biden’s presidential administration), told WealthManagement.com that morale at the agency was “crushed” and likely at an all-time low.
“It is probably as bad, if not worse than it was during the Madoff scandal, which I think is widely agreed to be the lowest low point that the agency reached,” he said. “I mean, they are successfully gutting the agency.”
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