Two SEC lawyers resigned after a federal judge harshly fined and reprimanded the Wall Street regulator for a “serious abuse” of power in a crypto case.
Michael Welsh and Joseph Watkins resigned this month after an SEC official told them they would be fired if they stayed, according to people familiar with the matter. The pair were lead lawyers in a case against Digital Licensing Inc., a crypto platform known as DEBT Box.
The regulator's lawsuit against DEBT Box was marred by false statements and misrepresentations, as well as a lack of evidence, according to Robert Shelby, the federal district court judge in Salt Lake City who is hearing the case. Shelby took the extreme step of sanctioning the agency for abuse of power in March, and the SEC's enforcement chief has since apologized for the mistakes.
Neither Welsh nor Watkins, who were based out of the regulator's office in Salt Lake City, returned phone calls seeking comment. The SEC declined to comment, as did a representative of the union representing the agency's staff.
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