In The News
May 12, 2023


Government watchdog group Empower Oversight on Wednesday opened up a second front in its ongoing battle to compel the U.S. Securities and Exchange Commission to hand over documents that it claims could provide insight into potential conflicts of interest related to the agency’s crypto dealings.

The group filed a complaint in D.C. federal court Wednesday, joining its December 2021 lawsuit against the SEC in Virginia federal court. Both lawsuits concern Freedom of Information Act requests scrutinizing the relationship between former SEC officials and certain crypto projects, which the group claims the SEC has failed to fulfill.

The lawsuit details three instances of publicly known business relationships between former SEC officials, which Empower contends are worthy of further scrutiny and warrant the production of the documents it has requested.

The complaint highlighted that former SEC Director of Division of Corporate Finance William Hinman publicly said he believed ether, the native token of the Ethereum blockchain, was not a security. However, Empower said that during his time at the SEC, Hinman reportedly continued to receive a law firm pension from his former employer, Simpson Thacher & Bartlett, which was a member of the pro-Ethereum group the Enterprise Ethereum Alliance.

The Wednesday lawsuit is the latest installment in a FOIA battle that kicked off in 2021 when Empower Oversight requested eight categories of records from the SEC relating to potential conflicts of interest. After a delay in response, the group filed a complaint requesting that a Virginia federal judge force the SEC to conduct a reasonable search related to its request and release any ensuing records. That case is ongoing, with Empower filing an opposition to an SEC motion for summary judgment last fall.

Empower Oversight President Tristan Leavitt said in a public statement that it is approaching two years since the first FOIA request at issue, and the SEC “has consistently stonewalled” attempts to gain insight into potential conflicts 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 Leavitt’s statement.

Read the full article HERE.