Republican Senators Pen Scathing Letter to Gensler for “Unethical” Handling of DEBT Box Case
A group of Republican senators criticized United States Securities and Exchange Commission (SEC) Chair Gary Gensler over the federal agency’s “unethical” handling of the DEBT Box case in a February 7 letter.
Senators Cynthia Lummis (R-WY), Bill Haggerty (R-TN), Thom Tillis (R-NC), JD Vance (R-OH), and Katie Boyd Britt (R-AL) all signed the letter lambasting the SEC for its now botched case against DEBT Box, where the federal agency accused the software firm of defrauding investors of $49 million.
Last month, the SEC decided to dismiss the lawsuit without prejudice after it was discovered the federal agency had presented several representations against DEBT Box that were deemed false and misleading.
“We are greatly concerned by the Commission’s conduct in this case,” the senators wrote in the letter. “It is unconscionable that any federal agency—especially one regularly involved in highly consequential legal procedures and one that, under your leadership, has often pursued its regulatory mission through enforcement actions rather than rulemakings—could operate in such an unethical and unprofessional manner.”
In December 2023, SEC lawyers apologized for their conduct and stated that the federal agency would conduct “mandatory training” on the “duty of accuracy and candor” going forward.
I've just read over the documents in the Debt Box case and this is absolutely shocking behavior. The SEC went to a judge seeking an emergency order to paralyze several businesses and blatantly misrepresented facts to get it before anyone on the other side could defend themselves.
— David "JoelKatz" Schwartz (@JoelKatz) December 5, 2023
“The Commission takes this Court’s concerns seriously and deeply regrets these errors,” a December 21st court
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