Empower Oversight Received a Report from the SEC's Office of Inspector General

After a long legal fight, Empower Oversight received a report from the SEC's Office of Inspector General. The report investigated whether former SEC official William Hinman had a conflict of interest

The SEC's Office of Inspector General has completed an investigation into former SEC official William Hinman, examining a potential conflict of interest arising from his statements on Ethereum and his ties to a law firm involved in crypto.

Earlier this year, Empower Oversight requested the OIG to investigate Hinman's financial ties to Simpson Thacher, a law firm that represented Ethereum at the time. This interest arose from a 2018 speech by Hinman, where he declared that Ethereum was not a security, even as he was still receiving payments from Simpson Thacher for his previous role at the firm.

Indeed, at the time of his speech, Hinman was still being paid by Simpson Thacher, and he did fully disclose his financial relationships and did not personally benefit from any investment in crypto. However, Empower Oversight expressed disappointment that the probe was deemed too limited.

The non-partisan group stated that the inquiry should have spanned broader issues like the SEC's overall approach to conflicts of interest and the criteria used in selecting crypto firms for agency action.

"By narrowly focusing on whether criminal charges should be brought against Hinman, the SEC OIG completely missed the bigger issue here—an erosion of public trust in the agency due to inadequate transparency and an undeniable lack of faith in the integrity of its cryptocurrency enforcement decisions," said Empower Oversight President Robert J. Foster.

The OIG's December 9, 2024 report addressed a very specific question: did Hinman break any criminal conflict-of-interest laws? The report concluded that he did not.

However, Empower Oversight maintains that the priority should be on disclosing facts to the public. They noted that despite their cooperation with the SEC in securing the recovery of some of their law firm’s expenses, and their efforts to shed light on crucial issues concerning the SEC and crypto, they are still met with administrative hurdles in publishing basic fundamentals.

As such, Empower Oversight will continue to push for greater transparency and accountability from the SEC.