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The SEC does not seem willing to provide further documents to Empower Oversight as it feels such a move could affect its lawsuit against Ripple.
Empower Oversight noted in a recent press release that the Securities and Exchange Commission has filed a joint status report to delay Freedom of Information Act (FOIA) litigation proceedings.
According to Empower Oversight, the SEC claimed in the joint status report that it was awaiting approval from Simpson Thacher before it would share the documents with Empower Oversight because the records could be “subject to confidential treatment.”
The whistleblower and research organization noted that the move by the SEC was only a plot to allow Simpson Thacher, the agency’s former director William Hinman’s law firm, enough time to object to its request for information.
Jason Foster, founder, and president of Empower Oversight, said:
“The SEC is trying to duck accountability and delay judicial review of its failure to comply with FOIA by hiding behind the confidentiality interests of the law firm with whom its own ethics officials said its employee had a conflict.“
Reacting to the development, attorney John Deaton, who is currently representing over 65,000 Ripple (XRP) investors, noted that the SEC, which was established to “fight for justice” is now “officially obstructing justice.”
The SEC is supposed to fight for justice. Instead, it is now officially obstructing justice.
“Its claim that the law firm’s potentially confidential records are the ‘only remaining records to be released’ also shows a disturbing lack of good faith.”
1/3 https://t.co/XqhMURtwbs
— John E Deaton (@JohnEDeaton1) April 21, 2022
SEC’s Claims Portray Lack of Good Faith
Foster noted that the SEC is claiming that the Simpson Thacher documents are the only remaining records to be sent, adding that such claims portray a lack of good faith on the part of the security agency.
Following litigation filed under FOIA that was slammed against the SEC last year, Empower Oversight stated that it provided a list of names of people who are affiliated with certain entities under its investigation, including Hinman, in a bid to aid the SEC’s search.
SEC’s Change in Behavior
The SEC, which originally complied with Empower Oversight’s request, provided 200 pages of Hinman’s email conversation, showing the former finance director violated the SEC’s rules.
However, with several cryptocurrency enthusiasts suggesting that Hinman could have acted in ways to favor Ethereum over Ripple following his 2018 comments that ETH is not a security, “the SEC appears to have made no efforts to search for and produce records relating to those individuals,” Foster added.
Based on the SEC’s move to stall proceedings in the FOIA litigation it was charged with, Foster is calling on the Eastern District Court to replicate its usual accelerated procedures in the case.