The 45-minute Zoom call between SEC Chair Gary Gensler and the disgraded FTX co-founder Sam Bankman-Fried (SBF) in March 2022 raises questions. New York Post’s On The Money revealed that Gensler did not seek approval from the SEC’s Office of the Ethics Counsel for the meeting, which goes against the agency’s protocol. Experts suggest that it likely would have been denied if he had sought permission.
Although a spokesman for the SEC claims that Gary Gensler had approval from the ethics team, no supporting documentation has been provided. Special-access meetings like this have historically been breeding grounds for abuses of power, and the public deserves to know what transpired leading up to this meeting.
Sources within the SEC have mentioned that commissioners typically request email meetings with the Ethics office to create a paper trail. The fact that there is no such paper trail raises suspicion. Gensler’s failure to properly vet the meeting is notable, considering the potential conflicts of interest in the case. Mark Wetjen, FTX‘s former lobbyist and a close associate of Gensler, was responsible for setting up the meeting. This connection, coupled with the significance of the FTX case, raises further concerns about the meeting.
Additionally, Gensler’s decision to engage in a discussion about a work-in-progress crypto trading platform with SBF is seen as highly unusual for an SEC Chair. SBF reportedly boasted about his access to Gensler, highlighting the friendly nature of their conversation. This stark contrast to the treatment received by other crypto companies, such as Coinbase, has drawn criticism. Coinbase CEO Brian Armstrong has criticized the SEC for being unwilling to meet with him, making a 45-minute meeting with an SEC chair seem like an “eternity.”
Critics argue that Gensler’s decision to take the meeting without proper clearance reflects his operating style at the SEC. The agency’s timing of charging SBF after his extradition to the US has also raised eyebrows. Republican members of Congress, including Chair of House Financial Services Rep. Patrick McHenry, have demanded more information about Gensler’s correspondence with SBF and the SEC’s relationship with FTX. The SEC Chair has faced criticism for handling the FTX fraud case.
The lack of transparency, potential conflicts of interest, and questionable judgment in accepting the meeting have drawn significant scrutiny to Gensler and the SEC’s actions, On The Money rightfully summarizes.
