The Chairman of the United States House Oversight and Investigations Subcommittee, Bill Huizenga, has recently called out the US Securities and Exchange Commission (SEC) for its failure to produce appropriate documents associated with the charges and arrest of disgraced FTX founder Sam-Bankman Fried.
During Thursday’s hearing on June 22, Huizenga said “100% of the documents” that the SEC provided on SBF’s charges and arrest are publicly available. This suggests an inadequate response to the congressional committee.
The lawmaker has criticized the Commission for not meeting the Feb. 24 deadline of producing documents that raised “questions about the SEC’s process and cooperation with the Department of Justice” in the case of SBF’s arrest earlier this year.
Huizenga pointed out that the documents shared by the SEC contained minimal information, mainly consisting of public briefings on the collaborative efforts between the SEC and the Justice Department in the case of SBF.
— Financial Services GOP (@FinancialCmte) June 22, 2023
SEC General Counsel Responds
Countering the arguments put forward by Michigan Rep. Bill Huizenga, SEC General Counsel Megan Barbero said that releasing the documents to the committee was simple as they “do not require a commission vote” and others were a “significant process and undertaking”. However, he added:
“The challenge here in balancing the concerns is that the committee staff has identified as the priority the commission’s action memo, which is the very document that contains the information that could prejudice our civil enforcement action and the parallel criminal investigation”.
Lawmakers other than Huizenga also discussed SEC oversight regarding FTX and Bankman-Fried, but they asked different questions. Rep. Pete Sessions from Texas inquired about a meeting between Gary Gensler and SBF, suggesting that the SEC chair had personal access to the former FTX CEO. Rep. Al Green from Texas called for regulations on crypto firms like FTX, which he believed had deceived investors, and requested Gensler’s testimony.
The SEC investigation began because Bankman-Fried was scheduled to testify before the House Financial Services Committee in December 2022. At that time, FTX had declared bankruptcy, and a criminal investigation into Bankman-Fried’s alleged misconduct was already underway. Before his congressional testimony, Bankman-Fried was arrested in the Bahamas and extradited to the United States.
Bankman-Fried is facing two criminal trials, one in October 2023 with eight charges and another in March 2024 with five counts. The SEC and Commodity Futures Trading Commission have also filed separate civil lawsuits against SBF, but those cases have been postponed until the criminal trials are concluded.