The President May Remove an SEC Chair
Examining Presidential Authority Over SEC Leadership
Donald Trump told an audience of crypto enthusiasts that he would fire SEC Chair Gary Gensler if he wins the presidential election. That comment provoked debate, including this blog post from a law professor, about whether the President has power to fire an SEC Chair.
A President may get rid of an SEC Chair in either of two ways. First, the President may fire any SEC Commissioner without needing a cause or a reason. Nothing in the federal securities statutes restricts a President’s power to remove an SEC Commissioner. That contrasts with other statutes, for example the legislation creating the CFPB, in which Congress said the President may remove the Director from office only for inefficiency, neglect of duty, or malfeasance in office.
Absent a statute, a President has authority under the Constitution to remove a federal officer such as an SEC Commissioner. The President’s power can even override a statute, as it did in the case concerning the CFPB Director. I filed an amicus curiae brief making these points about SEC Commissioners in SEC v. Jarkesy. The Court’s final opinion in Jarkesy did not reach the issue.
Second, the President has the power to choose the Chair. Without removing or appointing a Commissioner, the President may transfer the position of Chair from Gensler to a different Commissioner. That authority is in Reorganization Plan No. 10, which is an obscure instrument that has an unusual legal status.
Andrew N. Vollmer is a senior affiliated scholar with the Mercatus Center at George Mason University; former deputy general counsel of the Securities and Exchange Commission; former professor of law, general faculty, at the University of Virginia School of Law; former partner in the securities enforcement group of Wilmer Cutler Pickering Hale and Dorr LLP.