Empower Oversight Exposes SEC’s Bad Faith FOIA Tactics in Crypto Conflicts Lawsuit Filing

Empower Oversight. October 5, 2022.

WASHINGTON – Empower Oversight filed its opposition to the Securities and Exchange Commission’s (SEC)’s motion for summary judgment in the ongoing Freedom of Information Act (FOIA) lawsuit over documents related to conflicts of interest and selective enforcement in cryptocurrency cases.

The filing demonstrates that the SEC intentionally misinterpreted the plain text of Empower Oversight’s request, admittedly ignored statutory deadlines without cause, and solicited search terms to locate documents, only to ignore those as well.

Jason Foster, Founder and President of Empower Oversight, issued the following statement:

“It’s abundantly clear that the SEC is doing everything within its power to hide information from the public about these issues. The key question is why? Despite its stubborn delays and resistance to our FOIA requests, the few documents that we managed to pry loose from the agency point to serious ethical concerns.

“Perhaps it is merely bureaucratic incompetence, but it is also possible that the SEC is acting like it has something to hide because it actually has something to hide. That’s why FOIA exists, to hold government accountable through transparency. The law requires more than the SEC seems willing to provide.”

Read the full press release here.

Former SEC director Hinman made millions from a pro-Ethereum firm during tenure

By Protos Staff. May 13, 2022. (Protos)

A Freedom of Information Act (FOIA) request by a whistleblower has revealed former Securities and Exchange Commission (SEC) director William Hinman was receiving millions of dollars in retirement benefits from a pro-Ethereum law firm during his tenure.

Hinman worked as the SEC’s corporate finance division chief from mid-2017 to late-2020. In June 2018, Hinman famously stated, “The Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions,” (our emphasis).

However, information obtained by Empower Oversight Whistleblowers & Research shows Hinman was receiving substantial retirement benefits from his previous employer at the time of his statement. Law firm Simpson Thatcher & Bartlett is a member of the Enterprise Ethereum Alliance, a group that supports Ethereum projects. Hinman returned to the entity after his time at the SEC, serving as a senior advisor.

Read full article here.

SEC Asked To Probe Ex-Official’s Crypto Statements

By Al Barbarino. May 10, 2022. (Law360)

A nonprofit watchdog asked the U.S. Securities and Exchange Commission to investigate its former corporate finance head, Bill Hinman, now a Simpson Thacher & Bartlett LLP senior adviser, claiming statements he made about cryptocurrencies while at the agency may have presented a conflict of interest. 

Empower Oversight Whistleblowers & Research claims Hinman didn’t follow instructions that the SEC’s ethics office gave him to avoid conflicts tied to his financial interests in Simpson Thacher, including the firm’s connection to the Enterprise Ethereum Alliance, or EEA, according to a letter the group sent Monday to the SEC’s Office of the Inspector General.

“Directives without compliance monitoring and sanctions for noncompliance are not meaningful; they are window dressings,” said Jason Foster, president of Empower Oversight, in an announcement about the letter.

Read the full article here.

Empower Oversight Requests SEC-OIG Conduct Investigation into the Failure of the SEC’s Ethics Office to Prevent Cryptocurrency Conflicts of Interest by Senior Staff

By Empowr Oversight. May 10, 2022. (Empowr)

WASHINGTON — Empower Oversight sent a letter to the Office of the Inspector General of the Securities and Exchange Commission (SEC-OIG) requesting a comprehensive review of the SEC’s ethics officials to properly manage SEC official William Hinman’s potential conflict of interest regarding cryptocurrency issues. The letter describes in detail instructions that the SEC’s Ethics Office provided to Mr. Hinman and actions by Mr. Hinman that are inconsistent with the instructions.

Specifically, records that were disclosed to Empower Oversight in response to an August 12, 2021, FOIA request show that the SEC’s Ethics Office cautioned Mr. Hinman that he had a direct financial interest in his former law firm, Simpson Thacher, and thus, he needed to recuse himself from any matters that would affect the firm; and, lest he may have misunderstood its position, the Ethics Office explicitly told him not to have any contact with Simpson Thacher personnel. Further, the Ethics Office provided Mr. Hinman with a draft memorandum, which was to be issued under his name, that established a screening arrangement to ensure that he complied with his obligation to recuse himself from certain matters with which he had a financial interest, or a personal or business relationship.

Read the full article here.

Former SEC Director accused of corruption, how might this affect the Ripple case?

By Samuel Wan. April 11, 2022. (Cryptoslate).

Whistleblower group Empower Oversight has released details of emails received in a freedom of information request related to the ongoing SEC vs. Ripple lawsuit.

Among the 200 pages or so, they say there is evidence that former SEC Director William Hinman had a conflict of interest while initiating legal proceedings against Ripple.

The point of contention centers around Hinman’s involvement with the Ethereum Enterprise Alliance via New York-based legal firm Simpson Thacher. This was originally reported by CryptoSlate in April 2021.

However, things take a more ominous spin this time as the emails reveal damning information not known last year.

Read the full article here

Shining a Light on Would-be Cryptocurrency Regulators

By Jason Foster. February 11, 2022. (Substack)

Healthy financial markets need clarity and transparency to function properly. Financial regulators are supposed write clear rules so that markets can operate on a level playing field. Instead, they sometimes make arbitrary enforcement decisions that look unfair and undermine public confidence in their integrity.

Among the safeguards against the kind of government overreach that distorts markets and hinders innovation, the Freedom of Information Act (FOIA) is a vital tool for Americans to enforce transparency and accountability on the government—but it takes a lot of persistence to make FOIA work the way it should.

Read the full article here