Yes, Trump probably could remove the SEC chair
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If re-elected, former president Donald Trump really probably could strip SEC chair Gary Gensler of his place at the head of the agency.
Why it matters: The former president promised to "fire" the American blockchain industry's No. 1 enemy last month in front of a cheering crowd at this year's biggest Bitcoin conference, but there's actually no precedent for a president firing a leader of the agency.
Reality check: By custom, SEC chairs normally resign if there's a change in the White House during their term, leaving a spot open so the new White House can appoint a leader, Andrew Vollmer, of the Mercatus Center at George Mason University and an alumnus of the SEC's legal team, told Axios.
- So if past is prologue, Gensler won't give Trump a chance to keep his word.
But let's say the current chair preferred to stick around through the end of his term in 2026. As others have reported, it might take a lot of effort to actually remove Gensler from the agency's five-member commission early.
- But when you look at the law, case law and one obscure bit of federal policy together, all signs point to SEC chairs leading the agency only as long as the president wants them there.
Zoom in: The "consensus view" among legal scholars, according to a blog post by UCLA Law professor Stephen Bainbridge, is that Trump, if re-elected, "likely could remove Gensler from his post as chairman," and designate one of the other four commissions to lead the agency.
- In response to a query from Axios, Bainbridge wrote another blog post in which he put his confidence on this at 95%.
The authority to do so is based, Bainbridge's posts explain, on an obscure policy from 1950 (which was written by the White House at the direction of Congress). That and case law also supports the view that the president can switch chairs at will.
- Vollmer goes a step further. He believes prior Supreme Court rulings make it explicit that the president is presumed to have the authority to remove his appointees under the faithful execution clause of the Constitution.
- But Vollmer also acknowledges that removals of appointees by the president are something of an open question in U.S. law, which Bainbridge breaks down in his second post.
Context: The U.S. Securities and Exchange Commission is an independent federal agency, so it's meant to have a bit of a remove from politics.
- Its five commissioners, including the chair, are nominated by the President with terms that last five years. The President designates the chair, the agency's top executive.
- Gensler was appointed chair by President Joe Biden in 2021.
💭 Our thought bubble: Trump wouldn't need to kick Gensler off the Commission for his Bitcoin base to view it as a promise kept, anyway.
- Particularly if he appointed a friendlier commissioner to take over leadership.
The bottom line: The roles of commissioner and chair of the commission are two different things.
