WASHINGTON – Empower Oversight has filed another records request with the Securities and Exchange Commission (SEC) related to conflicts of interest in its cryptocurrency enforcement decisions. The move is an effort to end the SEC’s gamesmanship and delays in refusing to conduct searches for records of communications using a specific list of names that the SEC first asked Empower Oversight to provide, and then promptly ignored, nearly a year ago in connection with an August 2021 request that is now the subject of ongoing Freedom of Information Act (FOIA) lawsuit against the SEC.
As explained in the background section of the new request, the SEC and Empower Oversight discussed the original request in a conference call in January 2022, to clarify the scope of the search required. During that call, SEC FOIA officials “…claimed that they had no way of knowing the names of personnel from those entities [named in the request], and thus no way to search for them.” The SEC then “asked Empower Oversight to provide a list of names to guide additional searches, which Empower Oversight supplied on February 18, 2022.” Yet, the SEC “then refused to conduct those searches” and “suggested that the court should ignore the SEC’s refusal to use the list of names in searches, as opposed to viewing it for what it is: evidence that its search was intentionally and unreasonably narrow.”
From the outset, Empower Oversight clearly sought all records of communications from any personnel associated with the listed entities and demonstrated a willingness to reasonably narrow the scope of the request by limiting searches to a specific list of names when asked by the SEC to do so. And yet, as Empower Oversight has explained in court and again in this filing, the SEC unreasonably rejected Empower Oversight’s “good faith efforts at accommodation and wasted everyone’s time and resources to litigate the issue rather than simply conducting searches on the names it had requested.”
Jason Foster, Founder and President of Empower Oversight said, “As a result of this filing, it is now beyond dispute that the SEC is obligated under FOIA to conduct the searches it has refused to do thus far. Its delays and bad faith will not be rewarded. If necessary, we will seek judicial enforcement of this request at the earliest possible opportunity.”
In May, Empower Oversight sent a referral to the SEC Inspector General (IG) based on documents that raised questions about the failure of the SEC and its Ethics Office to properly manage SEC official William Hinman’s conflicts of interest regarding cryptocurrency issues, contacts with his former law firm Simpson Thacher, and that firm’s interest in promoting one cryptocurrency over others. Earlier this week, on the basis of the SEC’s response to a FOIA request filed by John Deaton, a lawyer and founder of crypto-law.us, Empower Oversight noted that there may be an investigation in response to Empower Oversight’s referral to the SEC IG about the lawsuit.
In October, Empower Oversight filed its opposition to the SEC’s motion for summary judgment in the ongoing FOIA lawsuit over documents related to conflicts of interest and selective enforcement in cryptocurrency cases.
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