The US Securities and Exchange Commission (SEC) has been facing the heat from different directions. The US regulatory watchdogs had locked horns in an ongoing battle with the fintech firm, Ripple Labs. Here, Defendant had launched offensive attacks against the SEC, allegedly to put the latter in the back seat.
An action filed by Empower Oversight Whistleblowers & Research, last year wanted the SEC to comply with a Freedom of Information Act. It was related to potential conflicts of interest in its cryptocurrency-related enforcement decisions.
Now, the two agencies made headlines with the latest update.
SEC Releases E-mails to Empower Oversight in Crypto Conflicts Lawsuit, Still Searching for Morehttps://t.co/coeiFeQd9N
— Empower Oversight (@EMPOWR_us) February 25, 2022
On 25 February, SEC Released e-mails to Empower Oversight in crypto conflicts lawsuit – obtained the first documents from the SEC as a result of this litigation under FOIA. The said documents had emails between two now-former senior SEC officials, Simpson Thacher & Bartlett.
It included 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 were almost entirely blank and contain duplicate information. Nonetheless, the authority appreciated this move from the SEC.
“This initial document production by the SEC is a step in the right direction, but it must keep its commitment to conduct additional searches 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”
In addition to this, at the SEC’s request, the said agency provided a detailed list of people associated with the entities named in the FOIA. John Deaton, a famed lawyer in the SEC Ripple lawsuit was one amongst them.
Correct, because the SEC's limited its initial searches to only emails to and from "https://t.co/IrvVtnEd3x"—even though our request was not at all so narrow.
Thus, our admin appeal and request for records about their search methods, leading to new searches that are ongoing.
— Jason Foster (@JsnFostr) February 25, 2022
The SEC formally responded to the complaint on 18 February, 2022. Denying that it failed to meet its statutory obligations under FOIA. Empower Oversight initially filed its FOIA request with the SEC on 12 August, 2021.
Different readers had different narratives, but mostly against the SEC. For instance, a user, Crypto Mark slammed SEC for the discussed issue above. He asserted:
“Unfortunately the SEC are never going to send you the correct full emails, they will do anything to avoid the correct searches, maybe you need to include their email addresses in the search as well as just their full names.”
Another one tweeted:
Are you kidding me, those aren't emails, those are shooting the shit about nothing. There are no conversations going on at all. So something and I mean something"s" are missing for sure. It is is so obvious that these emails say absolutely nothing why send if nothing discussed!
— Sherry Ryals-Eader (@EaderSherry) February 25, 2022
Overall, it has been a bad start for the US regulatory watchdogs in both the active litigation. Can the SEC come up with an impactful approach in time?