Elon Musk’s DOGE Targets SEC for Job Cuts Amidst Ongoing Legal Battles

WASHINGTON, D.C., February 23, 2025 – In a bold movement that has sent waves within the framework of financial regulation, the Elon Musk Government Efficiency Department (DOGE) sets out its views within the Securities and Exchange Commission (SEC) on major cuts. This initiative is part of a broader strategy to simplify federal agencies, but it triggered a storm of controversy due to Musk’s personal history with the SEC and the potential impact on market surveillance.

Background: Mandate and actions of the DOGE

Created by President Donald Trump, the DOGE operates under Musk’s direction with a clear directive: to identify and dispose of waste, fraud and abuse within federal agencies. Since its inception, DOGE has undertaken significant labour reductions in various ministries, including the Internal Revenue Service (IRS) and the National Aeronautics and Space Administration (NASA). These measures resulted in the dismissal of tens of thousands of federal employees, primarily those on probation, as Reuters reported.

A personal vendetta?

The decision to focus on the SEC raised eyebrows, given Musk’s tumultuous relationship with the agency. In January 2025, SEC sued Musk, claiming that it had not adequately disclosed its acquisition of Twitter shares in 2022, resulting in investors being underpaid for over $150 million. Musk criticized the SEC by describing it as a “completely broken organization” and questioning its priorities, as Cointelegraph points out.

Possible effects on financial supervision

Critics argue that the reduction of ESA could seriously undermine its ability to effectively regulate financial markets. The agency plays a crucial role in Wall Street Police, research on internal trade and prevention of Ponzi programs. Benjamin Schifrin, Director of Value Policy at Better Markets, expressed concern that such reductions could hinder ESA’s compliance capabilities, as stated by Investment News.

Legal challenges and political ramifications

The aggressive approach of DOGE was not triggered. A coalition of 19 states brought legal action to deny DOGE access to sensitive Treasury data, leading a federal judge to issue a preliminary order. The judge concluded that the process did not have adequate security measures and that it was hasty and deficient, which could result in the disclosure of confidential financial information, as explained in the policy.

Moreover, democratic legislators expressed concern about Musk’s potential access to confidential SEC information. Representatives of Maxine Waters and Brad Sherman expressed concern about the risks posed by the integrity and security of US financial markets, as outlined in the policy.

Conflicts of interest and ethical concerns

Musk’s dual role as a federal candidate and private contractor led to discussions on possible conflicts of interest. Its management of DOGE, together with its companies, led to a careful examination of the impartiality of its actions. Critics argue that Musk’s involvement in the restructuring of the federal agency could benefit its private companies, as The Guardian mentioned.

Financial Community reactions

The financial sector is closely following this development. Some contractors are concerned that the reduction in ESA’s workforce may result in a decrease in regulatory oversight, which could increase the risk of financial misconduct. Others believe that streamlining the organization could lead to more effective operations. The total impact of DOGE’s actions on the SEC remains to be seen, but this initiative has certainly given rise to a lively debate on the future of financial regulation in the United States.

As DOGE continues its plans, the balance between effective government operations and strong regulatory oversight remains a controversial issue. The results of this initiative could have a lasting impact on the relationship between private companies and public governance.