President Donald Trump’s administration has yet to release a report on alleged conflicts of interest by a former U.S. Securities and Exchange Commission director.
Empower Oversight, a nonprofit organization dedicated to improving independent government oversight, raised questions about William Hinman, who served as director of the SEC’s Division of Corporation Finance from May 2017 to December 2020.
Empower Oversight obtained documents that it said showed Hinman may have violated federal ethics rules regarding conflicts of interest. The group’s investigation resulted in a referral of evidence to the SEC OIG in May 2022. In February 2024, the SEC’s Office of Inspector General said it was in the “final stages” of an investigation, according to correspondence the group posted.
Outside groups have kept pressure on the SEC to release the Hinman report. Earlier this month, Consumer Action for a Strong Economy (CASE) called on outgoing SEC Chairman Gary Gensler to release the SEC’s Office of the Inspector General’s report on potential conflicts of interest by Hinman.
The Center Square filed a Freedom of Information Act request for the report in December 2024. At that time, a spokesperson for the SEC’s OIG told The Center Square the Hinman report had “been issued to SEC management.”
In February, an SEC researcher told The Center Square that the FOIA office was consulting with the SEC “regarding the accessibility of the requested report.”
Hinman raised eyebrows in a 2018 speech when he said, “based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.” He said the same about Bitcoin, another cryptocurrency.
Empower Oversight said records and other information showed that Hinman failed to disclose his direct interest in his former law firm, Simpson Thacher, and by extension, his direct financial interest in an organization co-founded by the law firm, the Enterprise Ethereum Alliance, which describes itself as an “industry organization whose objective is to drive the use of Enterprise Ethereum” and its cryptocurrency, Ether. Ether’s value rose after Hinman’s speech, Empower Oversight noted.
CASE leader Matthew Kandrach urged the SEC to release the Hinman report.
“The Inspector General’s investigation into the former Director of Corporation Finance is well known. It’s past time to release the IG’s report,” he said in a statement. “We are asking Chairman Gensler to do the right thing and release the IG report so the American people can know what happened leading up to the government’s most consequential actions on crypto regulation.”
Empower Oversight said it obtained records through the Freedom of Information Act that showed the SEC’s Ethics Office cautioned Hinman that he had a direct financial interest in his former law firm, Simpson Thacher, and thus, he needed to recuse himself from any matters that would affect the firm. And the Ethics Office told him not to have any contact with Simpson Thacher personnel. The Ethics Office also gave Hinman a draft memorandum, which was to be issued under his name, that established a screening arrangement to ensure that he complied with his obligation to recuse himself from certain matters with which he had a financial interest, or a personal or business relationship, according to Empower Oversight.
