Govt watchdog group files lengthy FOIA request demanding access to internal @SECGov documents and records targeting Jay Clayton, William Hinman and Marc Berger over "potential conflicts of interest" on crypto while in office

[VanHasen]

 

[VanHasen]

 

 

[Julian_Williams]

This looks very bad for SEC.  They are going after the same documents SEC are withholding from Ripple.  Is this Gensler's worst nightmare?  Has Gensler been using his position to conceal Hinman's and Claytons fraudulent and corrupt behaviour?  Gensler is failing to contain this case, and it is now morphing into a criminal investigation, albeit by independent lawyers, of his organisation.

Are Empower Oversight working with SEC whistle blowers (see reports today that SEC lawyers are leaving SEC because Gensler has been overriding their handshake settlement deals). 

https://empowr.us/wp-content/uploads/2021/08/2021-08-12-JF-to-SEC-FOIA.pdf

RE: FREEDOM OF INFORMATION ACT REQUEST

Dear FOIA Officer:

Introduction Empower Oversight Whistleblowers & Research (“Empower Oversight”) is a nonpartisan, nonprofit educational organization dedicated to enhancing independent oversight of government and corporate wrongdoing. We work to help insiders safely and legally report waste, fraud, abuse, corruption, and misconduct to the proper authorities, and seek to hold those authorities accountable to act on those reports by, among other means, publishing information to inform the public.

Background

We write today seeking information regarding the appearance of conflicts of interest by former high-level officials at the SEC relating to cryptocurrencies. It is in the public’s interest that the government’s emerging regulatory approach to cryptocurrencies is based on objective legal principles, without the appearance that conflicted SEC officials may be picking cryptocurrency winners and losers based on personal financial interests. The way in which these former SEC officials declared whether particular cryptocurrencies were securities—and thus subject to SEC regulation —raises public integrity concerns.

As publicly reported, Mr. William Hinman worked as the Director of the Division of Corporate Finance at the SEC from May 2017 through December of 2020, having previously been a partner at the law firm Simpson Thacher.1 Mr. Hinman reportedly continued to receive millions of dollars from Simpson Thacher while employed at the SEC. Notably, Simpson Thacher is a member of the Enterprise Ethereum Alliance, an “industry organization whose objective is to drive the use of Enterprise Ethereum.”3 In a June 2018 speech in his official capacity as an SEC official, Mr. Hinman declared that the Ethereum cryptocurrency, Ether, was not a security, stating that “based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.”4 After his declaration, Ether’s value then rose significantly.5 When Mr. Hinman departed the SEC in December of 2020, he rejoined Simpson Thacher as a partner.6

That same month, the SEC filed a lawsuit against one of Ethereum’s rivals, Ripple, alleging that its XRP cryptocurrency was a security, such that the company’s offering and sales of XRP had been in violation of federal securities laws.7 The value of XRP fell 25% immediately after the announcement of the SEC lawsuit.8 Of note, the leader of the SEC’s Enforcement Division that brought the suit, Marc Berger, then left the SEC shortly thereafter, joining Mr. Hinman as a partner at Simpson Thacher.9

Additionally, there are potential concerns regarding former SEC Chairman Jay Clayton. As with Mr. Hinman and Ether, while at the SEC, Mr. Clayton publicly stated that Bitcoin was not a security,10 and the value of Bitcoin rose.11 The SEC’s lawsuit against Ripple was filed at the end of Mr. Clayton’s tenure there. Shortly after he left, he reportedly joined One River Asset Management, a cryptocurrency hedge fund that focuses exclusively on Bitcoin and Ether—not XRP.12 The SEC’s handling of cryptocurrency issues is of significant public importance, and these appearances of conflicts of interest raise substantial issues. Transparency from the SEC is the only way to ensure accountability to the public. In light of this, we are filing this FOIA request to seek the facts.

Records Request

1. All records relating to communications from May of 2017 through December of 2020 between William Hinman and any personnel from Simpson Thacher, including calendar entries, notes, or emails between Mr. Hinman and any email address from the domain “@stblaw.com”;

2. All records relating to communications from May of 2017 through December of 2020 between William Hinman and any personnel from the Enterprise Ethereum Alliance, including calendar entries, notes or emails between Mr. Hinman and any email address from the domain “@entethalliance.org’:

3. All records relating to communications, including calendar entries, notes or emails between Mr. Hinman and any personnel in the SEC’s Office of the Ethics Counsel regarding Mr. Hinman’s continued payments from Simpson Thacher while employed at SEC, his potential recusals or conflicts related to his prior or future employment at Simpson Thacher, as well as his discussions and negotiations with Simpson Thacher regarding rejoining the firm;

4. All records relating to communications from May of 2017 through January of 2021 between Marc Berger and any personnel from Simpson Thacher, including calendar entries, notes or emails between Mr. Berger and any email address from the domain “@stblaw.com”;

5. All records relating to communications from May of 2017 through January of 2021 between Marc Berger and any personnel from the Enterprise Ethereum Alliance, including calendar entries, notes or emails between Mr. Berger and any email address from the domain “@entethalliance.org’:

6. All records relating to communications, including calendar entries, notes, or emails between Mr. Berger and any personnel in the SEC’s Office of the Ethics Counsel, regarding Mr. Berger’s discussions and negotiations with Simpson Thacher, including all communications regarding potential recusals or conflicts related to his potential employment with Simpson Thacher;

7. All records relating to communication from May of 2017 through December of 2020 between Jay Clayton and personnel from One River Asset Management, including calendar entries, notes or emails between Mr. Clayton and any email address from the domain “@oneriveram.com”;

8. All records of communications, including calendar entries, notes or emails between Mr. Clayton and personnel in the SEC’s Office of the Ethics Counsel regarding Mr. Clayton’s discussions and negotiations with One River Asset Management, including all communications regarding potential recusals or conflicts related to his potential employment with One River Asset Management

 

 

Edited August 16, 2021 by Julian_Williams

[CryptoPitbull]

I love this. I love all of it. This is music to my ears. But, part of me still hesitates to celebrate because somehow I fear that this will be somehow swept under the rug. 

Will someone explain the seriousness of this and what the chances are that the SEC can simply ignore this like they seem to be doing with everything else?

 

[Julian_Williams]

29 minutes ago, CryptoPitbull said:

I love this. I love all of it. This is music to my ears. But, part of me still hesitates to celebrate because somehow I fear that this will be somehow swept under the rug. 

Will someone explain the seriousness of this and what the chances are that the SEC can simply ignore this like they seem to be doing with everything else?

 

Empowered Oversight are working with whistleblowers, so they know what to ask for and why they are asking. 

In the Ripple case the documents are sealed in Court and if there is a settlement they will never see the light of publicity.  This is quite different, the lawyers at Empowered Oversight make FOIAs for the purpose of making them public.  If there is evidence of corruption they will put it on the public record, and after that it gets really nasty (Well that is my take on what the intention of FOIA are).

I suppose Gensler has to go to the Courts and explain why the FOIA should be rejected by the Courts and why the allegations by the whistle blowers should be ignored. This is now set to drag on even after SEC settle with Ripple and I think it will make good reading for the clients of Mass Media publications.  Everyone enjoys a scandal, and seeing rich pigs outed.

 

Edited August 17, 2021 by Julian_Williams

[Julian_Williams]

 

[CryptoPitbull]

19 minutes ago, Julian_Williams said:

Empowered Oversight are working with whistleblowers, so they know what to ask for and why they are asking. 

In the Ripple case the documents are sealed in Court and if there is a settlement they will never see the light of publicity.  This is quite different, the lawyers at Empowered Oversight make FOIAs for the purpose of making them public.  If there is evidence of corruption they will put it on the public record, and after that it gets really nasty (Well that is my take on what the intention of FOIA are).

I suppose Gensler has to go to the Courts and explain why the FOIA should be rejected by the Courts and why the allegations by the whistle blowers should be ignored. This is now set to drag on even after SEC settle with Ripple and I think it will make good reading for the clients of Mass Media publications.  Everyone enjoys a scandal, and seeing rich pigs outed.

 

Thanks for the reply. So do you think this could have an impact on Ripple settlement? The SEC might have been more forgiving if they knew that those documents might not ever be seen. Now they might be exposed anyway.

[Julian_Williams]

Just watched the video, and learnt EO are after the SEC communications to external players, not the confidential internal letters that SEC claim are privileged, and this make it much more likely that their request will be granted.  Usually they have 20 days to reply.

[Julian_Williams]

11 minutes ago, CryptoPitbull said:

Thanks for the reply. So do you think this could have an impact on Ripple settlement? The SEC might have been more forgiving if they knew that those documents might not ever be seen. Now they might be exposed anyway.

Yes but to my eyes it looks even worse for SEC is they are both corrupt and still go on beating up Hinman's and Clayton's enemies after they have left SEC.  Gensler has to fight on two fronts, and this makes him look as dirty as his predecessors?  Just my take.

[xrpmeplease]

aint freedom grand? lol

[HAL1000]

I can't be bothered reading all this NEWS, wake me up when the movie comes out, LOL.

The Self Enriching Criminals are in trouble - it's amazing to think the sheriff is even more corrupt than those this sheriff is supposed to go after, whilst screwing over the very people they are supposed to protect and who help pay towards their salaries. I hope all those involved get nailed, along with their string pullers.

Also, if these FOIA requests are successful, then it might lead to a flood of them on many questionable SEC actions in the past. Hey GG we all know what happened to the guy on the left, literally hung and left out to dry in his case, figuratively in your case, prepare yourself.

Edited August 17, 2021 by HAL1000

[HAL1000]

 

[HAL1000]

Deaton's FOIA request:-

https://www.crypto-law.us/wp-content/uploads/2021/03/FOIA-Request-to-SEC_2.05.2021.pdf

 

[HAL1000]

Just an FYI for all you FOIA fans, it's old news but seems applicable to this thread:-

https://mosttraded.com/2021/02/04/response-on-feb-15-foia-request-from-ripple-could-be-pivotal-says-lawyer/

 

[Julian_Williams]

1 minute ago, HAL1000 said:

Deaton's FOIA request:-

https://www.crypto-law.us/wp-content/uploads/2021/03/FOIA-Request-to-SEC_2.05.2021.pdf

 

Wow the tables are now being reversed on Gensler.  His first duty as chairman of SEC should have been to restore the reputation of SEC.   Instead of responding to a petition from 30k XRP concerned holders that they had been victims of SEC corruption he ignored even acknowledging he had received the request, and tried to fob us off with his new twitter feed telling us about his family life and what a nice man he is.