Two attorneys, Michael Welsh and Joseph Watkins, from the Securities and Exchange Commission (SEC), have stepped down following allegations of significant misrepresentations in a cryptocurrency investigation from the previous year.
The report states that the two individuals were given an ultimatum: they had to leave their positions at the securities regulatory body or face termination, after being implicated in the legal action against Digital Licensing Inc., better recognized as DEBT Box.
According to a report by Bloomberg on April 22, two individuals identified as Welsh and Watkins resigned from the U.S. Securities and Exchange Commission (SEC) recently. Sources close to the situation who requested anonymity have confirmed this information to Bloomberg.
After Judge Robert Shelby of the Federal District Court scolded the SEC for misusing its authority in the DEBT Box case, where Welsh served as the SEC’s lead lawyer and Watkins headed the investigation team, several resignations ensued.
SEC vs. DEBT Box
In July, DEBT Box and its leaders were faced with allegations of misappropriating approximately $49 million from investors. Welsh and Watkins contended that the crypto company was transferring funds overseas, leading them to request a judge’s order to seize assets. The court granted their petition, and DEBT Box entered receivership as an additional protective measure.
After reconsidering the commission’s justification, Judge Shelby reversed his initial decision, as he discovered that the pair had provided incorrect information in court. Later on, the SEC’s Enforcement Division Director, Gurbir Grewal, issued an apology for any perceived misconduct, while DEBT Box was granted monetary reimbursement to cover their legal expenses by the court.
After the financial regulator on Wall Street faced sanctions, federal prosecutors chose to drop the case against DEBT Box without the possibility of reopening it. Subsequently, DEBT Box filed a lawsuit against the regulatory body, requesting approximately $1.5 million in compensation.
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2024-04-22 23:44