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Empower Oversight Sues SEC Over Unreleased Report on Ethical Conflicts
Empower Oversight, a non-partisan watchdog organization, has filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) for failing to disclose a report on ethical conflicts and selective enforcement within the agency.
The SEC’s Office of Inspector General completed the report over a year ago, but the agency has yet to release it despite repeated Freedom of Information Act (FOIA) requests. The lawsuit seeks to compel the SEC to disclose findings related to former SEC Division of Corporate Finance Director William Hinman.
Potential Conflicts of Interest
The investigation focuses on potential conflicts of interest involving Hinman’s ties to his previous law firm, Simpson Thacher, which had financial interests in promoting Ethereum. The SEC’s handling of this case has raised concerns over regulatory bias and the agency’s enforcement actions.
Empower Oversight has been pursuing SEC transparency since August 2021, filing multiple FOIA requests and lawsuits seeking documents related to agency communications with crypto entities. According to the organization, the SEC’s delays suggest a pattern of avoiding accountability in its enforcement actions.
“The SEC’s silent treatment is old and tired, and its refusal to release these records is, quite frankly, suspicious.”
Tristan Leavitt, president of Empower Oversight, emphasized the importance of transparency in addressing concerns over regulatory bias and ensuring accountability in the crypto sector. The SEC has faced mounting criticism for its regulatory approach, with industry leaders accusing the agency of selective enforcement.
Criticism of SEC’s Regulatory Approach
Former SEC Chair Gary Gensler faced scrutiny for aggressive litigation against major crypto firms like Coinbase and Ripple. Industry leaders, including Coinbase, have accused the SEC of selective enforcement, highlighting the need for greater transparency and accountability in the agency’s actions.
Empower Oversight remains committed to obtaining the SEC OIG report, arguing that public access to the findings is necessary to evaluate the agency’s handling of crypto regulations. The organization’s efforts aim to promote transparency and accountability in the crypto sector, ensuring a fair and level playing field for all stakeholders.
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