Ripple lawsuit: DC non-profit obtains SEC docs amid potential conflict of interest

Rick Steves

William Hinman and Marc Berger left the SEC to join Simpson Thacher & Bartlett, which is part of the Enterprise Ethereum Alliance, a coalition of companies built to market Ethereum as an enterprise solution.

Empower Oversight has obtained the first documents from the SEC as a result of litigation under the Freedom of Information Act (FOIA).

The FOIA request was filed on August 12, 2021, but the SEC didn’t respond, which led the non-profit to file a lawsuit, submit an administrative appeal to the SEC’s initial claims that there were no responsive records, and sent a letter to the SEC and a new FOIA request for records related to how the SEC’s FOIA personnel were conducting searches for responsive records.

The “checks and balances” organization wants to analyze potential conflicts of interest in its cryptocurrency-related enforcement decisions, particularly the SEC v. Ripple lawsuit which was filed the day before the departure of SEC Chair Jay Clayton. Three months later he was announced as an advisor of crypto-focused hedge fund, One River.

Other former SEC officials are also under suspicion, including ex-SEC Director of Corporation Finance, William Hinman, whose fate might be hanging in the balance as the judge in the XRP lawsuit reconsiders if his 2018 speech on Ether was his personal opinion or public guidance. Hinman left the SEC and rejoined the law firm, Simpson Thacher & Bartlett.

Simpson Thacher & Bartlett is part of the Enterprise Ethereum Alliance, a coalition of companies built to market Ethereum as an enterprise solution. Since Hinman’s speech, Ether took out Ripple as the #2 crypto by market cap while Ripple was increasingly pressured by the SEC for its alleged unregistered securities offering.


Empower Oversight wants more names

Empower Oversight announced the documents obtained from the SEC consist of emails between two now-former senior SEC officials and any email address at the law firm that employed them after they left the SEC, Simpson Thacher & Bartlett.

They include 1,053 pages of emails involving William Hinman, the former Director of the SEC’s Division of Corporation Finance, and 46 pages of emails involving Marc Berger, the former Acting Director of the SEC’s Division of Enforcement.

However, due to formatting issues, many of those pages are almost entirely blank and contain duplicate information. On February 18, at the SEC’s request, Empower Oversight provided a detailed list of people associated with the entities named in the FOIA request so that SEC can identify additional responsive records rather than limiting its searches to just certain email address domains.

“This initial document production by the SEC is a step in the right direction, but it must keep its commitment to conduct additional searches in order to fulfill its legal obligation to transparency. Empower Oversight will not relent in its commitment to enforcing accountability through the public’s right to know,” said Empower Oversight Founder and President Jason Foster.

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