An article that was published back in April 2021, by Bruce Love spoke about how Gary Gensler the new SEC chairman is pushing his SEC attorneys to the point where some are choosing to walk out the door.
According to Love:
The SEC has seen high attorney attrition this year, according to a tally of moves from the agency, and those talking with internal SEC lawyers are expecting more attorney exits. Some former SEC lawyers say Gensler’s propensity to break up handshake settlement deals that were in process before he became chairman in April has created some distrust with current SEC staff, as well as his hard-charging approach to managing SEC lawyers. Meanwhile, law firm hiring demand appears to be driving some exits, too.
According to data provider Firm Prospects, which tracks attorney moves including in and out of federal agencies, 16 lawyers left the SEC from January through July 21 to return to private practice.
Ex SEC lawyers have openly stated that they have reached settlement agreements with several clients (handshake deals) but Gary Gensler has destroyed them when it came time to sign off. According to EX Sec lawyers who have recently worked on enforcement deals with the SEC, multiple settlements have been rejected as they’ve been presented to the commission for approval because Gensler, they say, wants more compensation from the defendants and feels the levels of the last few years have not been sufficient.
One former SEC lawyer, who is now a partner at a D.C.-headquartered firm, said.
“He wants these cases settled, but he wants the resolutions to be stronger and more significant,”
The situation is disconcerting on two fronts, say former SEC lawyers who are now in private practice. One is that the staff is demoralized when a settlement is rejected by the commission. The other is that it “doesn’t look good,” said another ex-SEC attorney based in D.C., to go back to defense counsel and say “we thought we had authority to reach the settlement we agreed [on], but we don’t.”