Republicans Request SEC Documents Related to FTX, Sam Bankman-Fried, and DoJ

FTX founder Sam Bankman-Fried leaves following his arraignment in New York on Dec. 22, 2022. Ed Jones/AFP via Getty Images

Rep. Patrick McHenry (R-N.C.) and Rep. Bill Huizenga (R-Mich.) are requesting information relating to the arrest of failed cryptocurrency exchange FTX founder Sam Bankman-Fried from Securities and Exchange Commission (SEC) Chair Gary Gensler.

Huizenga, who is the Oversight and Investigations Subcommittee Chairman, issued a press release saying he and McHenry, who is the chairman of the House Financial Services Committee, demanded records and communications between SEC employees and external communications with the Department of Justice (DOJ) regarding the charges against Bankman-Fried.

The lawmakers were particularly interested in the timing of the charges and arrest, which came just before his scheduled testimony before the House Financial Services Committee.

Questions on Arrest Timing

“The timing of the charges and his arrest raise serious questions about the SEC’s process and cooperation with the Department of Justice,” the lawmakers wrote.

Bankman-Fried was due to testify before the House Committee on Dec. 13, 2022, but was arrested the night before by Bahamian officials. The arrest was made after Bahamian officials were informed by the DOJ that fraud charges had been filed against Bankman-Fried.

On Dec. 12, the SEC’s enforcement director Gurbir Grewal announced the agency had separately authorized civil charges against Bankman-Fried.

John Ray, the current CEO of FTX, ended up testifying without Bankman-Fried in attendance.

Following that announcement, the U.S. Attorney for the Southern District of New York confirmed that he had filed an indictment against Bankman-Fried and that the indictment would be unsealed the following morning, on Dec. 13, 2022.

“Presumably, the SEC’s Division of Enforcement did a complete investigation into the actions by Sam Bankman-Fried and presented the findings to the commission for its review and to authorize the charges,” the lawmakers said in their letter.

Call For Transparency

“Yet, the timing of the charges and his arrest raise serious questions about the SEC’s process and cooperation with the Department of Justice. The American people deserve transparency from you and your agency.”

The SEC was asked to produce communications between any SEC Division of Enforcement employees from early November 2022 through Feb. 9, 2023, as well as communications between any employees and the Department of Justice relating to charges filed against Bankman-Fried, for the same period of time.

This comes on the heels of a Feb. 1 decision by a New York judge who granted a request from the Department of Justice to block Bankman-Fried from attempting to contact both current and former employees of the failed cryptocurrency exchange FTX, as The Epoch Times previously reported.

The judge’s decision came after federal prosecutors requested that Bankman-Fried’s bail conditions be revised in a letter filed with the court on Feb. 10, citing worries about possible witness tampering.

Prosecutors claimed that the former CEO had contacted current and former FTX employees—as well as the general counsel of the FTX U.S. affiliate—referencing the possibility of a “constructive relationship” between the defenses.

However, FTX received approval on Feb. 8 to subpoena its founder and members of his family as part of the company’s investigation into “misappropriated and stolen” funds.

U.S. Bankruptcy Judge John Dorsey approved FTX’s request to subpoena Bankman-Fried, as well as his parents, Barbara Fried and Joseph Bankman, his brother Gabriel Bankman-Fried, former FTX Chief Technology Officer Gary Wang, former Alameda Research CEO Caroline Ellison, and former FTX chief operating officer Constance Wang.