WASHINGTON – The Securities and Exchange Commission (SEC) Office of Freedom of Information Act (FOIA) Services suggested recently that there may be an investigation in response to Empower Oversight’s referral to the SEC Inspector General (IG) regarding conflicts of interest and selective enforcement in cryptocurrency cases at the SEC.
John Deaton, a lawyer and founder of crypto-law.us, requested from the SEC all records related to Empower Oversight’s referral to the SEC IG, which requests a comprehensive review of the SEC’s ethics officials’ failure to properly manage SEC official William Hinman’s potential conflict of interest regarding cryptocurrency issues. In its response to Mr. Deaton’s records request, the SEC stated it was withholding all responsive records under a FOIA exemption that “protects from disclosure records compiled for law enforcement purposes, the release of which could reasonably be expected to interfere with enforcement activities.” Assuming its good faith and the accuracy of its response, the SEC implies that there is a pending investigation of issues raised in Empower Oversight’s referral.
“We hope the SEC’s letter to John Deaton means that the Inspector General’s Office is doing its job. Americans expect federal regulators to have one interest when doing their work: the public interest,” said Jason Foster, Founder and President of Empower Oversight. “However, if the SEC is simply dodging the transparency that is required by the federal public records law by asserting a blanket exemption, then that would be an abuse of its authority. Even if an ongoing investigation prevents the commission from providing, for example, records compiled by investigators in their investigative file, there are almost certainly other documents that it could produce without compromising any ongoing review. For example, the SEC could produce records related to Empower Oversight’s referral from SEC personnel who are not conducting the investigation into the issues raised by the referral. If Mr. Deaton appeals the Securities and Exchange Commission’s letter, more light could be shed on this process and potential wrongdoing.”
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