Nearly a year of text messages from former US Securities and Exchange Commission (SEC) Chair Gary Gensler were permanently deleted after a series of technical and management failures inside the agency, according to a new report from the SEC’s Office of Inspector General (OIG).
The watchdog says the loss undermines transparency rules that require the preservation of senior officials’ records.
Technology failures and mismanagement
The OIG report shows that Gensler’s government-issued phone stopped syncing with the SEC’s device management system between October 18, 2022, and September 6, 2023.
Although the phone worked normally, staff mistakenly classified it as inactive. This error triggered an automatic wipe under a new 45-day policy introduced by the Office of Information Technology (OIT) in August 2023.
When Gensler returned to SEC headquarters on September 6, 2023, he noticed that agency apps were missing from his phone.
Staff attempted to restore the device but instead performed a factory reset. The action erased all text messages and operating logs, covering nearly a year of communications.
The OIG said this chain of mistakes was “avoidable” and worsened by missed warnings, poor vendor coordination, and weak change-management practices.
The deleted messages may have included federal records that should have been permanently retained under government rules. Their loss also affects the SEC’s ability to respond to Freedom of Information Act (FOIA) requests.
The SEC spent about $53,000 on a contractor’s review of the incident, which the OIG later found unreliable. It was concluded that oversight gaps and failures in device management caused a breakdown in record preservation.
Fallout and agency response
Following the incident, the SEC disabled text messaging across the agency, with limited exceptions. It also reported the loss of Gensler’s texts to the National Archives and Records Administration (NARA).
The agency pledged to strengthen oversight of system changes, enforce regular device backups for senior officials, and introduce safeguards before performing factory resets.
Management agreed with all five recommendations from the OIG. These include tighter supervision of technology operations and improved procedures for handling official devices.
The missing period coincided with the SEC’s heightened enforcement against the cryptocurrency industry. During that time, the agency charged Genesis and Gemini with unregistered offerings, secured a $45 million settlement with Nexo, and fined Kraken $30 million over its staking service.
The SEC also warned Paxos about its Binance-branded stablecoin and reinforced that most tokens meet the Howey Test. Internal records later showed that Ethereum was labeled a security in March 2023.
The OIG stressed that the loss of Gensler’s text records highlights a failure to comply with federal transparency requirements.
After leaving the SEC, Gensler returned to the Massachusetts Institute of Technology, where he teaches and researches artificial intelligence, financial technology, and public policy.