Michigan Representative Bill Huizenga, who chairs the United States House Oversight and Investigations Subcommittee, has called out the Securities and Exchange Commission (SEC) for its failure to produce appropriate documents related to the timing of the charges and arrest of former FTX CEO Sam Bankman-Fried.
In a June 22 hearing on oversight of the SEC, Rep. Huizenga said “100% of the documents” the commission had provided on SBF’s charges and arrest were publicly available, suggesting an inadequate response to the congressional committee. The lawmaker criticized the SEC for failing to meet a Feb. 24 deadline to produce documents that allegedly raised “serious questions about the SEC’s process and cooperation with the Department of Justice” in regards to SBF’s charges and arrest.
Rep. Huizenga suggested the documents provided by the SEC included little more than public briefings on “how the SEC and the Justice Department worked together” in SBF’s case. Megan Barbero, general counsel for the SEC, countered that releasing such documents to the committee was simpler as they “do not require a commission vote” and others were a “significant process and undertaking”.
“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,” said Barbero.
— Financial Services GOP (@FinancialCmte) June 22, 2023
Though not always along the same lines of questioning as Rep. Huizenga, other lawmakers invoked FTX and Bankman-Fried in discussing SEC oversight. Texas Representative Pete Sessions asked for details regarding a reported meeting between Gary Gensler and SBF, claiming the SEC chair had “personal access” to the former FTX CEO. Texas Representative Al Green called for regulating crypto firms like FTX, which “destroy[ed] investors’ dreams with ignoble schemes” and also requested Gensler testify.
The SEC inquiry stemmed from Bankman-Fried being scheduled to testify before the House Financial Services Committee hearing on Dec. 13. He was based in the Bahamas at the time FTX declared bankruptcy in November 2022 and the criminal investigation into his alleged misconduct was underway. Before Bankman-Fried could testify in Congress, he was arrested in the Bahamas and later extradited to the United States.
Authorities are planning two criminal trials for Bankman-Fried for 8 criminal charges and 5 counts scheduled to begin in October 2023 and March 2024, respectively. The SEC and Commodity Futures Trading Commission also filed separate civil suits against SBF, but those cases have been deferred until the criminal proceedings have been completed.