“But Bill, it occurs to us that you have a full financial conflict of interest with your old firm, not just an impartiality one. Hence, you should not be having any meetings with your old firm. Even group meetings.”
Empower Oversight, the nonprofit organization that filed a FOIA request in August 2021 on suspicions of improper conduct by the SEC officials in regard to the XRP lawsuit, has finally obtained and released SEC emails that prove that the agency and Bill Hinman was aware of his conflicts of interest.
“The documents show that the SEC ethics office cautioned former SEC official William Hinman that he had a direct financial interest in Simpson Thacher, yet Hinman continued to meet with the firm in spite of these warnings”, Empower Oversight announced on Twitter.
As can be seen in the documents disclosed, SEC’s Ethics Counsel Shira Minton sent an email to Bill Hinman on January 25, 2018, stating the “analysis is the same for Simpson as it’s always been – you have a bar under the criminal financial conflict with Simpson because you have an ongoing financial interest in the firm. meeting with them while having such a conflict is not permitted. As we discussed during your briefing – even calls with them are not permitted. It’s also a serious optics issue – you can’t be seen to be granting special access to a firm you have a financial interest in. this meeting is small enough to raise concerns”.
During the thread of emails, Shira Minton also replied: “But Bill, it occurs to us that you have a full financial conflict of interest with your old firm, not just an impartiality one. Hence, you should not be having any meetings with your old firm. Even group meetings.”
Hinman met with Josh Bonnie, a partner at Simpson Thacher, at least three times after that warning. 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.
The DC-based nonpartisan organization “scored some extraordinary emails regarding Bill Hinman, including one that shows that Hinman was warned that he has “a bar under the criminal financial conflict with Simpson because you have an ongoing financial interest in the firm””, said XRP community member and attorney James K. Filan.
“Hinman didn’t just have “retirement benefits”. He had an ongoing financial interest in the success of Simpson Thacher. The better his law firm did the better he did. Helping customers =💰(EEA). Ethics told him to not meet with his partners, yet he continued. He was a double agent!”, said John Deaton, attorney for the 65,000 XRP holders in the XRP lawsuit.
Judge Sarah Netburn will soon be ruling on the SEC’s motion for reconsideration in regard to the production of the plaintiff’s internal documents. Much has been said about them and many legal experts have shared their suspicions that these emails and notes could destroy the SEC’s case against Ripple. The emails revealed by Empower Oversight focus only on issues of conflict of interest.