March 18, 2024 9:45 pm Comments

The Securities and Exchange Commission was sanctioned by a court in the ongoing Debt Box lawsuit.

Judge Robert Shelby issued an 80-page ruling where he torched the SEC for its “gross abuse of power,” among other things.

By any measure, Judge Shelby’s recent ruling was scathing and left the SEC no quarter.

His ruling also calls into question the integrity of the SEC in all its ongoing lawsuits. If the SEC could behave so egregiously in the Debt Box lawsuit, what is to stop them from engaging in the same behavior toward any business entity? Meta Law Man writes:

“The judge in the Debt Box case has issued an 80-page opinion sanctioning the SEC for egregious misconduct in the case. The opinion is devastating to the SEC as an institution and to the particular lawyers who committed the misconduct.

The judge made it crystal clear that the SEC lawyers did not make an error–they lied intentionally. In an opinion that will surely be cited by litigants across the country for years to come, the judge found that:

“The critical evidence the Commission offered to obtain and defend the ex parte TRO lacked any basis in fact, yet the Commission nonetheless advanced that evidence in deliberately false and misleading ways.” The SEC engaged in a “gross abuse of the power entrusted to it by Congress.”

The SEC “undermined the integrity of the judicial process.” The judge has ordered the SEC to pay the attorneys’ fees of the defendants in the case. This is a sad day. The SEC was once a great institution, respected around the globe for its competence and integrity. Now is a time for accountability.

The judge found that the SEC engaged in a gross abuse of the power entrusted to it by Congress. Will Congress do anything about this?”

CoinDesk provided a different portion of the ruling:

“Each piece of support the Commission offered in seeking the TRO – and then later reiterated in defending the TRO – proved to be some combination of false, mischaracterized, and misleading,” the order said.

“Further, the Commission not only repeated and affirmed its misrepresentations in the face of contrary evidence, it presented new falsehoods to the court in an effort to subtly shift from its previous misrepresentations without acknowledging its previous errors.”

Financial Services GOP called out Gensler’s SEC: “GaryGensler’s SEC continues its losing streak in the courts. A judge has ruled against the SEC in the DEBT Box case—imposing sanctions on the Commission for acting in bad faith. This is one of the most alarming examples yet of Gensler’s abuse of power.”

Crypto Slate added:

The current filing also denies the SEC’s earlier motion to dismiss the case without prejudice, which would have allowed it to end the current proceedings and refile the case.

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