Key points:
Several representatives in the United States House of Representatives are making efforts to find ways to remove Gary Gensler, the Chair of the Securities and Exchange Commission (SEC), from his position. However, the legality of such actions is not a straightforward matter. Warren Davidson, an Ohio Representative, recently introduced the SEC Stabilization Act with the explicit purpose of dismissing Gensler. Gensler has been serving as the head of the SEC since April 2021, and his term is expected to continue until 2026.
While Davidson has made serious allegations of misconduct and abuse of power against Gensler, removing an independent agency official who was nominated by the President and confirmed by the Senate is a complex process. It is unclear if the President has the sole authority to fire an SEC commissioner. According to a legal expert, there needs to be a valid cause for forcing an SEC official to leave their position. A Supreme Court decision in 2010 established that commissioners can only be removed by the President under specific circumstances, such as inefficiency, neglect of duty, or malfeasance.
Unlike cabinet secretaries who serve at the pleasure of the President and can be asked to leave at any time, removing an SEC commissioner is more challenging. Expelling fellow lawmakers from Congress also requires a two-thirds vote and has been a rare occurrence in U.S. history, happening only 20 times.
Davidson introduced the SEC Stabilization Act in response to a tweet from Paul Grewal, the Chief Legal Officer of Coinbase. If this legislation becomes law, it would restructure the SEC by adding a sixth member to the commission, which currently consists of four commissioners and one chairperson. It would also redistribute certain powers from the chairperson to the commissioners.
Some media companies reached out to the SEC for comment, but a spokesperson declined to provide any statement.
House Republicans introduce bill to remove SEC Chair Gary Gensler, restructure agency
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