Recently, the question of whether former President Donald Trump could remove SEC Chair Gary Gensler has garnered attention, especially in light of Trump's pledge to do so. The key question is: Does the President have the authority to remove the SEC Chair?

The consensus among legal experts suggests that while it's not entirely certain, there's a strong belief—about 95% confidence—that the President does have the power to remove the SEC Chair. However, this situation is unprecedented, and the issue has never been tested in court. The prevailing view is that the SEC Chair serves at the pleasure of the President, though this remains an untested legal theory.

The Distinction Between SEC Chair and Commission Member

It's important to distinguish between removing the SEC Chair and removing a member of the SEC Commission. Historically, no President has ever removed an SEC Commissioner, although pressure has led to resignations, as was the case with former Chairman Harvey Pitt. However, there is no record of a President forcibly removing a Commissioner.

The Legal Landscape: Key Cases and Complexities

The legal question of whether a President can remove an independent agency head like Gensler is rooted in several key Supreme Court cases.

1. Myers v. United States (1926): This case established that the President has the exclusive power to remove executive branch officials, such as postmasters, without needing Senate approval. The Court emphasized that the removal power is a critical component of the President’s authority to ensure that laws are faithfully executed.

2. Humphrey’s Executor v. United States (1935): This case refined the Myers precedent by ruling that the President could not remove a member of the Federal Trade Commission (FTC) except for statutory reasons such as inefficiency, neglect of duty, or malfeasance. This decision underscored the independence of certain agencies, which perform quasi-legislative and quasi-judicial functions and thus require a level of insulation from presidential control.

These cases distinguish executive branch officials, who are directly accountable to the President, and members of independent agencies, who have a degree of protection from political pressures.

SEC vs. FTC: Different Statutory Language, Different Implications?

A critical difference between the FTC and the SEC lies in their founding statutes. The statute establishing the FTC explicitly states that Commissioners can only be removed for specific causes, like inefficiency or neglect of duty. The SEC’s founding statute, however, is silent on removal provisions, potentially because it was enacted before the Humphrey’s Executor decision and when the Myers precedent was still considered controlling.

This raises an argument that Congress may have omitted a removal provision in the Securities and Exchange Act because it assumed empowering the President to remove a Commissioner was consistent with constitutional principles at the time.

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The Wiener v. United States Complication

The Supreme Court’s decision in Wiener v. United States (1958) further complicates the matter. In Wiener, the Court ruled that President Eisenhower could not remove a member of the War Claims Commission, an independent body similar to the SEC, without cause, despite the statute being silent on removal. The Court reasoned that the commission's quasi-judicial functions necessitated insulation from political influence, thereby extending the principle of independence.

However, Wiener relied heavily on legislative history that demonstrated Congress’s intent to protect the War Claims Commission from external pressures. Such legislative history does not exist for the SEC, making it less clear how the Supreme Court would rule on a similar challenge today.

Modern Supreme Court Considerations

Adding another layer of uncertainty, the current Supreme Court's approach to statutory interpretation and presidential powers differs significantly from the Courts of the 1930s and 1950s. The modern Court has shown a tendency to favor executive authority, which could influence how it might rule on the SEC Chair's removability.

Conclusion: A Resounding “Maybe”

Ultimately, whether the President can remove an SEC Commissioner, including the Chair, remains an open question. The legal precedents suggest a possible but not definitive answer, making the bottom line a resounding “maybe.” Given current polling data and the uncertain future political landscape, this might remain a theoretical inquiry for now. However, should the situation arise, it will likely lead to a significant legal battle with implications for the autonomy of independent regulatory agencies.