- In fresh accusations against the SEC, U.S. Attorney John Deaton says some ex-SEC officials were personally vested in the Ripple lawsuit.
- He claims Bill Hinman came after his last days at SEC to quash any talks of a pre-suit settlement.
- Deaton backs up John Reed Starks that the SEC may have been partisan in its decisions.
With the dust of John Reed Stark’s accusations against the U.S. Securities and Exchange Commission yet to settle, John Deaton, in a new post, slams a former official of the regulatory agency for his role in the Ripple lawsuit. The U.S. attorney and crypto advocate made these comments while reacting to a Twitter post claiming that the SEC is not following the law in differentiating assets from securities.
According to Deaton, Bill Hinman, the former director of the SEC’s corporate finance division from 2017 – 2020, pushed for the case against Ripple to be filed. “He was so vested, he even came back AFTER his last day at the SEC to quash any talks of a pre-suit settlement,” he said in the post.
Deaton added that “despite his (Bill Hinman’s) own enforcement lawyers writing an XRP Howey analysis memo in 2018, that did NOT conclude with a recommendation for enforcement or even recommend sending a cease and desist letter to Ripple to stop selling XRP.”
Furthermore, the attorney said that Bill Hinman once testified under oath that the SEC does not have to show or satisfy all of the Howey elements for a transaction to qualify as an investment contract. The Howey test determines what qualifies as an investment contract under U.S. Securities laws.
The SEC has been the subject of several controversies following its loss in Ripple’s case. The regulatory agency has also come under fire from different circles for its actions against crypto entities on money laundering and KYC charges.
Backing up John Reed Stark’s comments, Deaton says while SEC staff employees are not political, the heads of the commissions are. “People who get chosen to lead an entire Division like Corporation Finance are not always selected because they are the most knowledgeable or experienced. Sometimes, they get picked because of who they know and, more importantly, who they can help (or hurt) once they are in power,” he said in the post on Twitter. According to Deaton, “Hinman is the perfect example of this.”
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