SEC Workforce Reductions Amid Market Turmoil

By Douglas Gillison and Chris Prentice

WASHINGTON/NEW YORK (Reuters) – The U.S. Securities and Exchange Commission (SEC) has lost 16% of its workforce since last year, impacting key divisions during market instability.

Most of these departures occurred after February when over 600 staff accepted early retirement incentives from the Trump administration, according to anonymous sources.

Chief Operating Officer Kenneth Johnson confirmed the 16% figure in an email to staff. Specific divisions experienced significant losses:
– Trading and Markets: At least 15%, possibly up to 20%.
– Office of the General Counsel: 20-25%.

Losing senior employees with vital institutional knowledge during historic market turmoil is concerning. Departures include key figures in market supervision and broker-dealer oversight.

Reuters reports that these losses could weaken the SEC’s operations in crucial areas. An SEC spokesperson declined to comment, but White House spokesperson Taylor Rogers emphasized the importance of maintaining fair and efficient markets under new SEC Chair Paul Atkins.

President Trump’s administration aims to reduce the federal workforce through buyouts, which they claim address inefficiencies. Special adviser Elon Musk’s Department of Government Efficiency (DOGE) has been involved in evaluating potential cuts and restructuring the SEC. This initiative has left SEC staff uncertain about job security and led to over 150 contractor cuts.

Joel Seligman, a Washington University professor, warns that staffing reductions can severely diminish the SEC’s ability to prevent fraud, calling the situation unprecedented. Notable recent departures include David Shillman, 20-year leader of Trading and Markets’ Office of Market Supervision.

Expert Jessica Wachter noted that the loss of institutional knowledge could hinder the SEC’s ability to respond effectively to market crises. Ensuring adequate staffing is vital to retain critical expertise and avoid exacerbating market issues.