The US Securities and Exchange Commission (SEC) is under fire after a recent report detailed a series of “avoidable” mistakes from the watchdog’s IT department that resulted in the loss of records linked to crypto enforcement actions during Gary Gensler’s tenure.

IT ‘Oopsie’ Wipes Gensler’s Texts

The SEC’s Office of Inspector General (OIG) has shared the final report detailing the findings of its review of the Office of Information Technology’s (IOT) actions that led to the loss of former SEC Chairman Gary Gensler’s text messages between 2022 and 2023.

According to the September 3 report, the OIT implemented a “poorly understood and automated policy” in August 2023 that caused “an enterprise wipe of Gensler’s government-issued mobile device.”

Executive summary of IOG's report. Source: sec.gov 

Seemingly, Gensler’s government-issued device was erroneously flagged as inactive and had not been backed up for nearly a year. OIT “hastily performed a factory reset,” which deleted text messages stored on the device and the device’s operating system logs between October 18, 2022, and September 6, 2023.

The incident was worsened after a series of “additional OIT actions, deficiencies, and missed opportunities, including a lack of backups and procedures that failed to consider record retention requirements for Capstone officials (such as Gensler),” the report explained.

The regulatory agency reportedly worked to recover or recreate the deleted text messages but was “unable to collect or determine the entire universe,” including some federal records. The review found that around 38% of the recovered text conversations were mission-related and concerned matters directly involving SEC senio

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Author: Rubmar Garcia