McHenry, Huizenga Probe Timing of SEC-DOJ Action Against Sam Bankman-Fried
Washington,
February 10, 2023 -
Today, House Financial Services Committee Chairman Patrick McHenry (NC-10) and Oversight and Investigations Subcommittee Chairman Bill Huizenga (MI-04) sent a letter to Securities and Exchange Commission (SEC) Chair Gary Gensler demanding records and communications between and among both the SEC’s Division of Enforcement, the Office of the Chair, and the Department of Justice (DOJ) regarding the timing of the charges filed against FTX founder Sam Bankman-Fried and his subsequent arrest prior to his scheduled testimony before the House Financial Services Committee.
Read the full letter to SEC Chair Gensler here or below.
“Dear Chair Gensler:
“On December 13, 2022, the House Committee on Financial Services held a hearing about the collapse of FTX. John Ray, the current CEO of FTX tasked with unwinding the organization after its collapse, testified before our Committee about his progress. We also expected to hear testimony from FTX’s former CEO, Sam Bankman-Fried. However, the night before the Committee’s hearing, Bahamian officials arrested him in anticipation of an extradition request from the United States. Bahamian authorities announced that they made the arrest after being notified by the United States that it had filed criminal charges against Sam Bankman-Fried. Following that announcement, the U.S. Attorney for the Southern District of New York confirmed that he had filed an indictment against Sam Bankman-Fried and that the indictment would be unsealed the following morning, Tuesday, December 13, 2022.
“The night of Sam Bankman-Fried’s arrest, Gurbir Grewal, the SEC’s Director of the Division of Enforcement, released a statement praising the arrest and announced that the SEC authorized charges against Sam Bankman-Fried. On December 13, 2022, the SEC filed charges against Sam Bankman-Fried for ‘concealing his diversion of FTX customers’ funds to crypto trading firm, Alameda Research, while raising more than $1.8 billion from investors.’
“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. 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. For those reasons, please produce the following:
- All records and communications between and among any employee in the SEC’s Division of Enforcement, including but not limited to Gurbir S. Grewal, for the period of November 2, 2022 to February 9, 2023, referring or relating to the charges filed against Sam Bankman-Fried;
- “All records and communications between and among any employee in the Office of the Chair, including but not limited to Gary Gensler, for the period of November 2, 2022 to February 9, 2023, referring or relating to charges filed against Sam Bankman-Fried
- “All records and communications between and among any employee of the SEC and the Department of Justice, for the period of November 2, 2022 to February 9, 2023, referring or relating to charges filed against Sam Bankman-Fried.
“Please provide this material as soon as possible, but no later than 5:00 p.m. on February 23, 2023. The Committee on Financial Services has jurisdiction to oversee the activities of the Securities and Exchange Commission pursuant to Rule X of the Rules of the House of Representatives.”
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