The Office of Inspector General found a former U.S. Securities and Exchange Commission director properly disclosed his interest in his former law firm before taking the post and making a crypto-rattling comment during a speech.
William Hinman, who served as director of the SEC’s Division of Corporation Finance from May 2017 to December 2020, didn’t have conflicts of interest with his former firm – Simpson Thacher & Bartlett LLP – or the firm’s membership in the Ethereum Alliance, according to the report.
“We found that at the time of his onboarding at the SEC, Hinman disclosed his financial interest in STB to [the Office of the Ethics Counsel] and took the steps prescribed by SEC ethics officials to mitigate or cure the potential conflicts of interest,” the OIG report found.
Empower Oversight, the nonprofit group that requested the investigation, questioned the report.
“This report completely fails to address the programmatic issues Empower Oversight raised in its referral to the OIG,” Empower President Tristan Leavitt said. “Just as I warned last July, by scoping its inquiry so narrowly, the Inspector General has done nothing to repair the public’s faith in the ability of the SEC – or its Inspector General – to identify, mitigate, or hold officials accountable for conflicts of interest.”
The OIG also said the when Hinman replied to a recruiter’s email by directing him to an STB partner, he didn’t violate any rules.
“Doing so did not violate the ethics regulations or guidance he received from OEC to recuse himself from matters involving STB,” according to the report. “Furthermore, Hinman’s miscellaneous contacts with STB did not violate ethics rules or guidance.”
Empower Oversight, a nonprofit organization dedicated to improving independent government oversight, raised questions about Hinman’s potential conflicts of interest. Empower Oversight obtained documents that it said showed Hinman may have violated federal ethics rules regarding conflicts of interest. The group’s investigation resulted in a referral of evidence to the OIG in May 2022. The Hinman report was issued in December 2024, but wasn’t released publicly until April 2025.
Hinman raised eyebrows in a 2018 speech at “Yahoo Finance’s Al Markets Summit: Crypto” when he said, “based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.” Ether’s value rose after Hinman’s speech, Empower Oversight noted.
The OIG said Hinman also followed all guidelines on the speech.
“With respect to the Yahoo speech, we determined that Hinman followed applicable ethics rules in preparing and delivering the speech,” the report said. “Finally, we uncovered no evidence that Hinman’s statements regarding Ether in the Yahoo speech had a direct and predictable effect on Hinman’s financial interests at the time or were made for his personal financial gain.”
The OIG report also detailed steps both Hinman and the SEC took to make sure any conflicts were mitigated.
Hinman joined the SEC in May 2017 after retiring from his partnership with STB. Hinman said he took the position at the suggestion of then-Chairman Jay Clayton, who appointed him Division Director. As Director of Corporation Finance, Hinman led rulemaking initiatives to strengthen public markets, enhance investor protections and broaden small business access to capital markets. He also guided market participants on various emerging issues, including digital assets.
Hinman disclosed during the SEC onboarding process that he received a retirement annuity from STB, paid monthly based on the firm’s profits. Such an agreement violates government ethics rules prohibiting government employees from accepting compensation from outside sources for representational services. OEC sought advice from the U.S. Office of Government Ethics about mitigating this conflict. OGE advised that Himan could continue to receive his STB retirement annuity while employed with the SEC if the annuity were fixed instead of variable. Hinman arranged to receive a fixed annuity for three years, through the end of 2020. After that, Hinman’s STB pension would revert to a profit-sharing arrangement.
“OEC informed Hinman that fixing the retirement annuity through 2020 would cure the financial conflict,” according to the report.
The OIG also found no problems with the Hinman’s 2018 speech.
“We also found no evidence to indicate that Himan had a financial interest in any digital assets, including Ether, while employed with the SEC,” according to the report. “Specifically, Hinman testified in his 2021 deposition that as far as he was aware, he did not own – either directly or indirectly – any type of financial interest in any security issued by a cryptocurrency company or digital asset before, during, and after his tenure as Division Director.”
The report even went a step further: “We also concluded that Hinman’s statements about Ether in the Yahoo speech did not rise to the level of ‘personal and substantial’ participation in a ‘particular matter’ that was pending before the SEC at the time of the speech. The attenuated connection between the Yahoo speech, the status of the Ether token as a security, the Ethereum Alliance, and STB’s participation in the Ethereum Alliance, an industry network, taken together, do not amount to a ‘direct and predictable’ financial benefit to STB or Hinman.”
