Anti-Corruption Watchdog: There Is Evidence to Prove That SEC Official Had Conflict of Interest in Ripple Lawsuit

Empower Oversight, an anti-corruption watchdog that has been tracking the lawsuit between Ripple, San Francisco-based cross-border payment firm, and the United States Securities and Exchange Commission (SEC), stated that there is evidence to prove that a key SEC official intentionally had a conflict of interest during the initiation of the case.

In a recent press release, the anti-corruption watchdog disclosed that it received over 200 email records through a Freedom of Information Act request, which shed light on a conflict of interest related to William Hinman, the former Director of the SEC’s Division of Corporate Finance.

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The non-profit Empower Oversight says the emails reveal that SEC officials had warned Hinman about a conflict of interest due to its connection with Simpson Thacher, a law firm that promoted Ethereum (ETH) through an organization called Enterprise Ethereum Alliance.

The press release published by Empower Oversight reads in part:

“SEC Ethics office cautioned former SEC official William Hinman that he had a direct financial interest in Simpson Thacher, and thus, he must recuse himself from any matters that would affect the firm.

“Additionally, the Ethics office explicitly told Hinman, per the documents, to not be in any contact with Simpson Thacher for any reason. However, Hinman met with Josh Bonnie, a partner at Simpson Thacher, at least three times after that warning.

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“Hinman also met with the co-founders and investors in Ethereum ahead of a market-moving speech he gave in 2018 declaring the digital asset Ether to not be a security, despite Simpson Thacher’s participation in the Enterprise Ethereum Alliance, which is dedicated to promoting the commercial use of Ethereum.

“This raises questions as to whether Hinman fully disclosed Simpson Thacher’s role in Ethereum from SEC Ethics officials and whether they would have approved the meetings or his speech if he had.”

One of the emails found in the documents says, “But Bill [Hinman], it occurs to us that you have a full financial conflict with your old firm, not just an impartiality one. Hence, you should not be having any meetings with your old firm. even group meetings.”

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