SEC Drops $53K After Gary Gensler’s Texts Mysteriously Vanish—Here’s What Happened

Another day, another six-figure oopsie in the halls of financial oversight.

Vanishing Acts & Taxpayer Tabs

The Securities and Exchange Commission shelled out $53,000 to recover—or explain—text messages from Chair Gary Gensler’s devices that somehow disappeared. Because when you’re regulating a $2T crypto market, apparently your own comms can just… poof.

Zero Recovery, Maximum Irony

The funds bought a deep dive into forensic recovery efforts. Spoiler: they found nada. Because nothing says 'transparency' like spending public money to uncover your own missing paper trail—or lack thereof.

Regulatory theater at its finest—because who needs accountability when you’ve got a budget?

Nearly a year’s worth of text messages from former U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler were permanently deleted due to a string of technology and management failures inside the agency, according to a new report from the SEC’s Office of Inspector General (OIG).

What Happened

The watchdog report reveals that between October 18, 2022, and September 6, 2023, Gensler’s government-issued phone stopped syncing with the SEC’s device management system. The SEC’s Office of Information Technology (OIT) mistakenly classified the phone as inactive, triggering an automatic wipe.

In an attempt to restore the device, staff performed a factory reset, which erased all text messages and operating logs. The OIG called this a series of “avoidable” mistakes made worse by the lack of backups.

Why It Matters

The deleted texts could have included federal records. Records of senior officials like Gensler are supposed to be permanently retained under government rules to ensure transparency and accountability. The loss may also impact responses to Freedom of Information Act (FOIA) requests.

The report further noted that the SEC had to spend around $53,000 on a contractor’s after-action review, which itself was deemed unreliable.

SEC’s Response

Since the incident, the SEC has:

• Disabled text messaging across the agency, with limited exceptions.
  
• Reported the loss of Gensler’s texts to the National Archives and Records Administration (NARA).
  
• Promised to improve its device management and backup processes.
  

Management agreed with all five of the OIG’s recommendations, including stricter oversight of system changes, regular device backups for top officials, and safeguards before any factory resets are carried out.

Broader Implications

The report showed that Gensler often used texts for routine scheduling, but investigators also found examples of mission-related communications with staff and other federal officials. This leaves uncertainty about the full scope of what was lost.

The OIG concluded that “avoidable deficiencies and missed opportunities” by SEC’s technology office led to a failure in preserving records that are legally required to be maintained.