TheCorporateCounsel.net

Apparently, the SEC’s buyout offer to its employees has been remarkably successful – perhaps a little too successful. This excerpt from a Politico article indicates just how big the voluntary exodus of SEC staffers may turn out to be:

Hundreds of SEC staffers have agreed to voluntarily leave the agency, according to three people familiar with the matter, an exodus that stands to substantially shrink the ranks of the top Wall Street regulator.

Through a mix of different programs, including the SEC’s recently offered $50,000 buyout, more than 10 percent of the agency’s roughly 5,000-person staff is expected to leave in the coming weeks and months, said the people, who were granted anonymity to discuss the private information.

One of the people said they expect the tally will be close to if not more than 15 percent, or 750 people, as the $50,000 offer is still available to staff who voluntarily resign or retire through the end of Friday.

That’s a very big hit, and to make matters worse, Politico says these departures involve some of the agency’s most experienced staff members. Of course, all this is happening before DOGE shows up to swing a scythe through Elon Musk’s favorite federal agency.

The current commissioners have stressed that they want to make the SEC more responsive to public companies and those seeking to raise capital. For example, Commissioner Peirce has said that the SEC wants Corp Fin and OCA to engage more with public companies on difficult disclosure issues, and to communicate early and often on the timing of reviews of registration statements in order to permit issuers to have increased confidence in their offering timelines.

Those are great goals, but the agency needs lots of experienced people around if it is going to have any hope of achieving them. Right now, it looks like whether the SEC will have enough of those people to do that is an open question. In fact, it’s fair to ask just how limited the SEC’s capabilities might be once Musk finishes with them. That’s a question that Hunton’s Scott Kimpel addressed last year, and his answer isn’t comforting to companies that need guidance on difficult disclosure issues or that hope to navigate the review process for offerings without significant delay.

We’ll have to see how this all plays out, but the attrition at the SEC is a source of legitimate concern for public companies and the lawyers who advise them. It’s also incredibly ironic to think that an agency that actually makes money for the federal government may see budget cuts that jeopardize its ability to accomplish the laudable objectives that its commissioners have laid out.

The only silver lining for members of TheCorporateCounsel.net is that whatever happens at the SEC, at least we have each other – just like we have for the past 50 years.

Every day, I’m awed by the willingness of the best and brightest lawyers in the country to share their insights with our community. Their expertise has allowed us to develop the high-quality resources that our members rely upon – and that they may need to rely upon even more in the days to come. If you’re not a member, consider joining today by subscribing online, emailing us at sales@ccrcorp.com or calling us at 800-737-1271.

– John Jenkins