- Empower Oversight has filed a complaint against the SEC in the D.C. court, seeking compliance with a FOIA request regarding conflicts of interest and selective enforcement in cryptocurrencies.
- The lawsuit aims to address the SEC’s lack of transparency and shed light on conflicts of interest involving former high-level officials.
Empower Oversight’s Lawsuit Against SEC for Crypto Conflicts
Empower Oversight, a prominent organization advocating for transparency and accountability, has taken legal action against the Securities and Exchange Commission (SEC) by filing a complaint in the United States District Court for the District of Columbia. The complaint seeks to compel the SEC to comply with a Freedom of Information Act (FOIA) request made in December 2022, which focuses on conflicts of interest and selective enforcement by former high-level officials regarding cryptocurrencies. The December 2022 request was made in response to the SEC’s failure to comply with Empower Oversight’s initial request over a year earlier.
It is 💯 safe to say that the SEC is stonewalling because they are hiding the truth. I know that there are good people who work at the SEC, but the leadership is corrupt. Hard stop. Let the public see the emails and documents. Thank you @EMPOWR_us. It shouldn’t be this difficult. https://t.co/t5qYsOC6LW
— John E Deaton (@JohnEDeaton1) May 11, 2023
In August 2021, Empower Oversight submitted a comprehensive FOIA request to the SEC, specifically seeking all communications related to cryptocurrencies between senior SEC officials and their former and future employers and related entities. The request was prompted by concerns surrounding conflicts of interest, notably involving former senior SEC official William Hinman. Hinman received substantial compensation from his former employer, Simpson Thacher, while being involved in guiding the SEC’s enforcement decisions on cryptocurrencies.
Simpson Thacher was part of a group that actively promoted Ethereum, a cryptocurrency that Hinman publicly declared as not being a security, despite the SEC claiming that other similar cryptocurrencies were unregistered securities in its enforcement actions.
Empower Oversight has been at the forefront of the battle for transparency from the SEC. In December 2021, the organization filed a lawsuit against the SEC in the Eastern District of Virginia, aiming to compel the agency to provide the requested documents in response to the FOIA requests. On February 23rd of the current year, Empower Oversight supported a motion with Judge Analisa Torres in the Southern District of New York to gain access to relevant SEC documents.
Tristan Leavitt, President of Empower Oversight, expressed deep concern about the SEC’s lack of transparency, emphasizing the urgency of the situation. He believes that the new lawsuit will compel the SEC to conduct the necessary searches, as required by law, and provide the long-awaited answers to the public regarding these clear conflicts of interest within the agency.
A year ago, in May 2022, Empower Oversight referred the matter to the SEC Inspector General based on documents raising questions about the SEC’s and its Ethics Office’s failure to effectively manage Hinman’s conflicts of interest regarding cryptocurrency issues, his contacts with his former law firm Simpson Thacher, and the firm’s vested 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, which revolves around obtaining documents related to conflicts of interest and selective enforcement in cryptocurrency cases.
Individuals with first-hand information relevant to Empower Oversight’s inquiries are encouraged to confidentially contact the organization.