Attorney Dave Michaels noted that the *Humphrey’s Executor* ruling protects SEC chairs from dismissal based only on executive preference.
SEC Chair Gary Gensler’s future has become a topic of discussion as the United States braces for potential changes following today’s election. There is speculation among certain individuals regarding potential changes in agency leadership in light of the prospect of a Trump or Harris presidency.
However, Dave Michaels, a digital currency attorney, recently highlighted certain legal nuances that could delay Gensler’s removal. Michaels made reference to preexisting legal precedents that provide precise safeguards for the heads of independent organizations such as the Securities and Exchange Commission.
Donald Trump or Harris May Not Have Authority to Dismiss Gary Gensler
He stated that it might be challenging to remove Gary Gensler from the picture. Michaels addressed the subject of whether a change in the administration would make it possible for Donald Trump or Harris to dismiss Gary Gensler from his position as Chair of the Securities and Exchange Commission (SEC) in a post that he made on social media.
He brought to his attention that the Supreme Court’s 1935 judgment in Humphrey’s Executor v. United States safeguards independent agency heads, like FTC commissioners, from removal based solely on executive preference.
The Federal Trade Commission (FTC) is the target of this order; however, it is sometimes considered to also apply to the Securities and Exchange Commission (SEC). The same operational independence and regulatory supervision roles of the SEC are the foundation for this view.
The law’s precedent suggests that the removal of independent agency leaders like Gary Gensler requires compelling reasons. We developed this safeguard to protect heads of regulatory bodies from the influence of political forces and changes in executive leadership.
It is for this reason that the Act does not offer direct authority to dismiss an SEC chair simply for the purpose of installing a preferred candidate, even if Donald Trump were to gain office.
Michaels underlined that due to the complexity of the legal structure, any attempt to remove Gary Gensler without providing documented reasons could result in lengthy legal conflicts. On the other hand, he brought up the fact that historically, SEC Chairs have frequently resigned when an opposition political party obtains control.
This gives the incoming administration the opportunity to choose a replacement who is consistent with their ideology. Michaels observed that this practice might potentially impact Gary Gensler’s decision in the event that there is a change in leadership.This type of voluntary departure has the potential to facilitate a seamless transfer, ensuring continued regulatory continuity at the SEC.
At the same time, the probability coincides with the forecast made by MetaLawMan that Gensler might retire in the event that Donald Trump is elected president. If Gary Gensler decides not to resign from his position, Donald Trump will have limited options.
He could have to resort to indirect actions such as reassigning roles inside the Securities and Exchange Commission. Any future change in leadership at the SEC could potentially impact the regulatory approach to bitcoin.
Under Gary Gensler’s leadership, the SEC’s increased enforcement proceedings have resulted in compliance costs for cryptocurrency companies surpassing $400 million. The industry has criticized the strict regulatory stance.
Marc Fagel, a former Securities and Exchange Commission member, recently expressed his disapproval of the agency’s sudden issuance of a Wells Notice to Immutable, an Ethereum-based gaming company.
Marc Fagel described the SEC’s abrupt approach as “risky,” highlighting that typically, businesses receive extensive information before receiving such letters. In a similar vein, Consensys identified scrutiny from the SEC as one of the factors that led to a 20% reduction in staff.
While this is going on, members of the cryptocurrency industry have hypothesized that Donald Trump would hire Dan Gallagher, the Chief Legal Officer of Robinhood, in order to reform the way the Securities and Exchange Commission (SEC) deals with digital assets.
Many people believe that his leadership has the potential to make regulatory requirements more transparent and to encourage innovation in the cryptocurrency industry.
