Judge Demands Explanation
The actions of SEC lawyers in the case were criticized by Utah’s top federal judge, Judge Robert J. Shelby, in November. He demanded that they provide a basis for their request to freeze DEBT Box’s assets through a restraining order. Specifically, he wanted clarification on the SEC’s claim that the company was attempting to move assets overseas to evade jurisdiction.
The SEC was thus required to explain the “false or misleading” statements it had made. One such example was the assertion that DEBT Box was closing multiple accounts while the litigation was ongoing.
SEC Concedes Misstatements
In the SEC’s response to the court, it admitted to misstating certain accusations in support of its request for the restraining order. The regulatory body acknowledged that it had not lived up to the expectations of accuracy and candor in court. It failed to correct inaccuracies promptly and neglected to clarify that some representations were inferences rather than directly supported factual assertions.
The SEC maintained that despite its shortcomings, it had acted in good faith by seeking the restraining order. It also implemented measures to rectify the mistakes, including appointing senior attorneys to oversee the case and mandating training on accuracy and candor for its staff.
DEBT Box’s Attempt to Evade Regulation
Meanwhile, the SEC remains steadfast in its belief that DEBT Box is attempting to move assets overseas deliberately to avoid the regulator’s jurisdiction. It accuses the firm of obstructing the ongoing investigation.
By acknowledging its errors and taking steps to address them, the SEC aims to show its commitment to the court and the pursuit of justice in the DEBT Box case.