Two US Securities and Exchange Commission (SEC) Lawyers Resign. This comes after a US federal judge sanctioned the organization and reproached the regulator for a “gross abuse” of power in a cryptocurrency case.
Michael Welsh and Joseph Watkins left their posts this month, according to people familiar with the matter.. This happened after the SEC representative said that they would be fired if they did not resign from their positions of their own free will.. The specialists were lead attorneys in the case against Digital Licensing Inc.. — crypto platforms (DEBT Box).
According to Federal District Court Judge Robert Shelby in Salt Lake City, «the regulator's lawsuit against DEBT Box was marred by false statements as well as a lack of evidence.». He sanctioned the agency for abuse of power in March of this year, and the SEC had to apologize for the mistakes of its specialists.
In July, the SEC charged DEBT Box and its executives with fraud amounting to at least $49 million.. At the request of the regulator, Shelby decided to freeze the company's assets. However, the decision was reversed after it found that the rugelator had made «materially false and misleading statements». The judge sanctioned the SEC for its «gross abuse of authority granted by Congress» and ordered the agency to pay a portion of DEBT Box's attorney fees.
Shelby rebutted some of SEC trial lawyer Welsh's arguments and also rejected evidence presented by Watkins.
In one case, Welsh told the judge that DEBT Box was closing bank accounts in Utah and moving assets overseas. The court found that this was not true. An SEC investigator later said a misunderstanding led to the error and apologized to the court. Later, the Commission appointed new lawyers in this case.
Neither Welsh nor Watkins responded to Bloomberg's phone calls seeking comment. SEC representatives also declined to comment on the matter.
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