By Douglas Gillison and Chris Prentice
WASHINGTON/NEW YORK (Reuters) -The U.S. Securities and Exchange Commission has lost 16% of its workforce since this time last year, two sources briefed on the matter said, leaving Wall Street’s top regulator with gaps across key divisions at a time of market turmoil.
Most of those staff members left since February when more than 600 accepted Trump administration offers to resign and retire early, according to one of the sources and a second source familiar with the matter. The people spoke on condition of anonymity as the details are not yet public.
Chief Operating Officer Kenneth Johnson cited the 16% figure on Tuesday in an email to certain staff that was described by the first two sources.
The Trading and Markets division has lost at least 15% of its staff, according to two other people familiar with the matter, with one of them saying it could be as high as 20%. The Office of the General Counsel, which is involved in the agency’s court battles and reviewing new regulations, among other things, has seen a 20-25% exit, said one of the sources and a second person briefed on the matter.
The loss of senior staff members with deep institutional knowledge coincides with historic market turmoil. Departures include senior employees in market supervision and overseeing broker-dealers.
Reuters is the first to report the extent of the SEC’s losses, which agency sources and SEC experts say shows an agency potentially weakened in key areas.
A spokesperson for the SEC declined to comment. Taylor Rogers, White House spokesperson, said that Paul Atkins, who was sworn in as SEC chair this week, would help maintain “fair, orderly and efficient markets.”
President Donald Trump’s administration has offered buyouts as part of an effort led by special adviser Elon Musk to slash a federal workforce they say is bloated and wasteful. The administration has also criticized what it calls the “weaponization” of the SEC’s enforcement functions.
Musk’s Department of Government Efficiency arrived at the SEC in late March. DOGE has been seeking access to data, Reuters previously reported, and solicited staff recommendations this week on changes to make the SEC more efficient, according to an all-staff memo seen by Reuters.
DOGE has been measuring and scrutinizing agency contracts and organizational charts and data for more possible cuts and restructuring, leaving SEC staff fearing for their jobs, three of the sources and another person familiar with the matter said.
More than 150 SEC contractors have also been cut in the recent downsizing, according to one of the sources.
“Cuts to the size of the staff … can lead to significant gaps in the performance of the SEC in preventing fraud,” said Joel Seligman, a professor at Washington University School of Law.
Seligman, a member of the “Shadow SEC” working group of policy experts, said the SEC had never seen such rapid staffing cuts.
At Trading and Markets, which polices stock exchanges, broker-dealers and clearing houses, the voluntary departures include David Shillman, who for more than 20 years led the division’s Office of Market Supervision, two of the sources said.
The office oversees self-governing stock exchanges and the rules they adopt as well as market structure policy. Such rules can kick in in the event of a market-wide shutdown triggered by deep sell-off of 7% or more, which nearly occurred on April 4.
Other departures are former senior Trading and Markets officials Randall Roy and Thomas McGowan, who together had decades of experience in overseeing broker-dealers, including responding to emergencies and scrutinizing capital requirements, two of the sources said.
Shillman, Roy and McGowan could not be reached for comment.
While remaining SEC staff also have capabilities in these areas, such deep experience can be a vital asset in times of turbulence, current and former officials said.
Jessica Wachter, who was the SEC’s chief economist under former Chair Gary Gensler before she stepped down earlier this year, said losing institutional knowledge of past crises and skills in working with the SEC’s own unique datasets can hamper its ability to work through difficult and specialized questions.
“If something breaks in the markets, it makes a difficult matter much worse,” she said. “It’s important to keep sufficient levels of staffing so that critical knowledge concerning these functions doesn’t get lost.”
(Reporting by Douglas Gillison in Washington and Chris Prentice in New York; editing by Megan Davies in New York and Richard Chang)
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