- John Deaton questioned many SEC seniors’ ethics and mentioned instances of conflicts of interest.
- Former SEC director William Hinman benefited financially from a law firm while working at the SEC.
- Jay Clayton, former SEC chairman, made profits alongside Hinman from Alibaba’s IPO.
In a detailed thread, John E. Deaton, attorney and founder of Crypto Law, shared the existing conflicts of interest among the U.S. Securities and Exchange Commission (SEC) staff.
Deaton’s statement is prompted by a tweet that emphasized how improper it was for former SEC chairman Jay Clayton’s financial interests to not be looked into after Clayton filed the XRP lawsuit on his last day of work. Immediately after, Clayton began working for a hedge fund that had made $1 billion on competing tokens three months earlier.
Deaton praised honorable SEC officials such as retired attorney Marc Fagel, who specialized in SEC enforcement and securities litigation. According to Deaton, Fagel avoided the appearance of conflicts of interest by not owning individual stocks, crypto, or commodities. He added that most SEC staff followed a similar path.
Directors, commissioners, or chairmen aren’t following the same path, according to Deaton. He mentioned the 18 USC 208 law, the financial conflicts of interest law, that prohibits all employees from participating in any particular matter that will have a direct and predictable effect on their financial interests. Deaton highlighted that any appearance of impropriety would be considered a violation of the statute.
Deaton emphasized the seriousness of the law and how it could be a criminal act if a real conflict existed. He said, “SEC Officials MUST honor all directives issued by Ethics personnel and take ALL necessary measures to eliminate ANY potential claim of impropriety.”
Shira Minton, the SEC’s Ethics Counsel, instructed William Hinman, the former director of the division of corporation finance, to stop all communication with his associates at the law firm Simpson Thacher due to the gravity of the situation. Hinman was reportedly a profit-sharing partner while working at the SEC.
Canaan, a technology company that produces computing equipment used in Bitcoin and Ethereum mining and is regarded as a direct beneficiary of Hinman, had its initial public offering (IPO) handled by Hinman’s law firm. Deaton stated that Hinman collected profits from the IPO while working at the SEC. Furthermore, Hinman made profits from the Alibaba IPO, along with Clayton.
Deaton has accused the SEC of not having clear crypto regulation guidelines, and there have been several conflicts of interest within the SEC. Deaton mentioned that Hinman repeatedly violated 18 USC 208, and he believed a “blind, deaf monkey” could convict Hinman.
The post Crypto Lawyer Exposes SEC’s Financial Interests: Are Regulations Biased? appeared first on Coin Edition.