WASHINGTON – Empower Oversight filed a complaint against the Securities and Exchange Commission (SEC – pdf) in the United States District Court for the District of Columbia seeking to compel the SEC to comply with a December 2022 Freedom of Information Act (FOIA) request regarding conflicts of interest and selective enforcement by former high-level officials regarding cryptocurrencies. The December 2022 request was an effort to counter the SEC’s bad faith gamesmanship in failing to comply with Empower Oversight’s initial request more than a year earlier.
In August 2021, Empower Oversight submitted a detailed FOIA request to the SEC seeking all communications between senior SEC officials and their former and future employers and related entities regarding cryptocurrencies. Former senior SEC official William Hinman received millions of dollars in compensation from his former employer, Simpson Thacher, while helping guide the SEC’s enforcement decisions on cryptocurrencies. Simpson Thacher was part of a group that promoted Ethereum, a cryptocurrency that Hinman publicly declared was not a security while the SEC claimed in enforcement actions that other similar cryptocurrencies were unregistered securities.
Since then, Empower Oversight has been at the forefront of the battle for SEC transparency. In December 2021, Empower Oversight filed a lawsuit against the SEC in the Eastern District of Virginia seeking to compel the agency to provide responsive documents to the FOIA requests. On February 23rd of this year, Empower Oversight supported a motion with Judge Analisa Torres in the Southern District of New York to gain access to pertinent SEC documents.
“The SEC’s failure to provide any transparency on this issue is making a bad situation look even worse. We’re approaching two years since Empower Oversight made its initial FOIA request, and a year and a half since our first lawsuit. Yet the SEC has consistently stonewalled any attempts to shed light on these clear conflicts of interest at the agency. This new suit against the SEC should force the SEC to do the searches it knows it must do under the law to give the public the answers we’ve long sought,” said Tristan Leavitt, President of Empower Oversight.
A year ago, in May 2022, Empower Oversight sent a referral to the SEC Inspector General based on documents that raised questions about the failure of the SEC and its Ethics Office to properly manage 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.
In October 2022, 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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