Former SEC official comments on Binance.US’ request for protection
Former Chief of Internet Enforcement at the SEC, John Reed Stark, has commented that the issue will likely be resolved through a compromise.
In its original filing, BAM complained that the Securities and Exchange Commission (SEC) demanded excessive information and depositions of numerous employees.
As such, BAM aimed to obtain a protective order from the courts. The requested order would allow the SEC to depose just four of BAM’s employees, excluding its CEO and CFO, while preventing the regulator from making overbroad inquiries. Those matters all relate to an ongoing case that the SEC initiated against Binance in June.
Former SEC official weighs in
The court has not yet dealt with Binance.US’s request. However, on Aug. 16, John Reed Stark — formerly the SEC’s Office of Internet Enforcement chief — weighed in on the matter and predicted the most likely outcome.
Stark said that it is likely that the SEC has demanded too much information and that BAM has requested too much in its protective order. He suggested that the two parties in the case will need to reach a compromise on the matter.
Stark added that the SEC previously obtained a consent order or temporary restraining order against Binance.US. This allows for expedited discovery, meaning that courts must resolve disputes more quickly than usual though the process is otherwise routine.
Stark also predicted that Judge Amy Berman Jackson would pass the matter to a magistrate judge, something that occurred later in the day. Judge Jackson referred Binance.US’s motion to Magistrate Judge Zia M. Faruqui in a court filing.
Stark finally noted that he believes that the U.S. Department of Justice (DOJ) will soon unseal or file an indictment related to Binance, complicating the SEC case further. Reports dating back to at least Aug. 2 suggest that those DOJ charges are forthcoming.