On October 16, the US Securities and Exchange Commission (SEC) issued a tweet cautioning the public to rely solely on the SEC for accurate information about the agency. Adding that the best source of information about the SEC is the regulator itself, the tweet read, “Careful what you read on the internet.”.
Cryptocurrency attorney John E Deaton swiftly responded to the SEC’s statement with a series of tweets:
Here’s a surprise: I disagree with the @SECGov’s latest statement. The best source of information about the SEC is NOT the SEC. Confirmation bias and self-serving statements by the SEC disqualify it. Likewise, pissed off investors are too close to be objective. Therefore, we… https://t.co/8SPEI43ORM
— John E Deaton (@JohnEDeaton1) October 16, 2023
Deaton expressed his disagreement, stating that the SEC is not the best source for information about itself due to its “confirmation bias and self-serving statements.” He argued that independent judges serve as a more reliable source of oversight and can offer an unbiased view of the SEC. The attorney cited,
The best source of information about the SEC is NOT the SEC. Confirmation bias and self-serving statements by the SEC disqualify it.
Deaton further elaborated on his stance by referring to a recent Appellate Court ruling that found the SEC’s actions to be “arbitrary and capricious.” He pointed out that defeating a claim of being arbitrary and capricious is relatively easy for a regulator; all that is required is a plausible explanation for their actions. However, the SEC failed to meet even this low standard.
In subsequent tweets, Deaton cited another case where the Appellate Court unanimously concluded that the SEC’s denial of a spot ETF was nonsensical. He also mentioned a federal judge in the Southern District of New York who called SEC lawyers “hypocrites” and accused them of lacking “faithful allegiance to the law.”
Deaton concluded by reiterating his trust in the judgments of independent courts over the SEC. He emphasized that when it comes to the SEC, he chooses to listen to what judges have to say, and according to him, they are “speaking loudly.”
The lawyer has raised serious allegations against the SEC in the ongoing Ripple lawsuit. Deaton accused the SEC of regulatory capture and conflicts of interest involving key figures like William Hinman and Jay Clayton. These allegations have added another layer of complexity to the SEC’s lawsuit against Ripple, which accuses the company of raising over $1.3 billion through an unregistered digital asset securities offering.
