Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Regulation | March 10, 2025
Image: Pixabay/Mohamed hassan
DOGE is going after the SEC, and who knows, the big 4 consultants could be next. As reported by Reuters, on February 28, 2025, the Chief Operating Officer of the U.S. Securities and Exchange Commission (SEC) Ken Johnson, confirmed that pushed by DOGE the SEC is offering employees $50,000 to voluntarily resign, retire, or transfer. Those that take this offer must decide by March 21 and leave by April 4, 2025, and must repay the money in full if they return within five years.
News of the SEC buyout offer, aligns with the wide sweeping cost-cutting initiative launched by the Trump administration and is being executed by Elon Musk at the Department of Government Efficiency (DOGE). DOGE is actively culling the federal workforce to get rid of excessive and bloated bureaucracy which is slowing down government operations. Since President Trump signed the DOGE executive order to expand its mandate, similar buyouts and layoffs have already reduced the federal workforce by more than 100,000 employees representing approx 4.4% of the 2.3 million federal workers from a broad range of federal agencies from Veteran Affairs to the IRS.
Given that the SEC plays a key role in investigating fraud, enforcing regulations and protecting investors, with fewer staff there are concerns about weakened financial protections and enforcement action delays. Wall Street firms are watching developments closely with some seeing a lighter regulatory touch as an opportunity while others are concerned about the longer term impact on market stability. Noteworthy that the SEC has replaced its dedicated Crypto Assets and Cyber Unit with a smaller Cyber and Emerging Technologies Unit, transitioning away from specialized crypto enforcement but not a 'free pass' accordingly SEC Commissioner Peirce.
The situation is evolving and fluid. Following legal challenges from labour unions who argue against President Trump's plans to encourage federal workers to resign with financial incentives, a federal judge has temporarily blocked the plan igniting further debate on its legitimacy.
With the March 21, 2025 deadline approaching, SEC staff are thrust into uncertainty and must decide whether to take the offer or remain in this type of changing regulatory environment. Do you think these massive government cuts expose financial markets and investors to greater risk or make the government more efficient? The world is watching including Canada's tech bros interested in taking the same approach in the great white north.
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