FDIC Chairman To Resign After Sexual Harassment Scandal

In the first – but certainly not last – major shake up at a key US financial regulator under the Biden admin, Federal Deposit Insurance Corp. Chairman Martin Gruenberg bowed to pressure to resign from the bank regulator after an external investigation found widespread sexual harassment at the agency and lawmakers of both parties berated his leadership, capping a nearly two-decade career at the agency.

In a press release, Gruenberg said he would resign once a successor had been confirmed, avoiding an outcome that would leave FDIC Vice Chairman Travis Hill, a Republican, as the agency’s acting chairman. Hill is a former staffer at the agency who has served on the five-member board for about a year.

“It has been my honor to serve at the FDIC as Chairman, Vice Chairman, and Director since August of 2005”, Gruenberg wrote. “Throughout that time I have faithfully carried out the critically important mission of the FDIC to maintain public confidence and stability in the banking system. In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed. Until that time, I will continue to fulfill my responsibilities as Chairman of the FDIC, including the transformation of the FDIC’s workplace culture.”

Gruenberg’s announcement comes hours after the Democratic chairman of the Senate Banking Committee called for new leadership at the FDIC, becoming the most powerful Democrat to seek chairman Gruenberg’s ouster after a report, commissioned in response to a Wall Street Journal investigation, found widespread allegations of sexual harassment, discrimination and bullying pervaded the agency.

Ohio Democratic Sen. Sherrod Brown said that after reviewing the report and hearing from additional FDIC employees, “I am left with one conclusion: there must be fundamental changes at the FDIC. Those changes begin with new leadership, who must fix the agency’s toxic culture and put the women and men who work there – and their mission – first.” He called for President Biden to nominate a new chair and for the Senate to act quickly to confirm them.

And now, it’s Gary Gensler’s turn, who will almost certainly lost his job – and Senator Karen’s patronage – if as many speculate the SEC is about to approve an ethereum ETF.