The Securities and Exchange Commission is closing its Salt Lake City regional office, citing “significant attrition” — following the departure of two attorneys sanctioned by a federal judge for presenting misleading evidence against cryptocurrency company DEBT Box.
Attorneys Michael Welsh and Joseph Watkins resigned this spring, according to court documents in the fraud prosecution. Judge Robert J. Shelby called their conduct a “gross abuse of power,” ordered the SEC to pay $1.8 million in legal costs for the defendants and dismissed the case in May.
Tracy Combs, who became director of the Salt Lake Regional Office in 2022, also left in May, according to her LinkedIn.
[Read more: Prosecutors must pay $1.8M to Utah crypto brokers accused of fraud.]
The shuttering means a state with a long-held reputation as a “fraud capital” won’t have an SEC office for the first time since the 1950s, when a frenzy over uranium stocks led to the opening of a branch office overseen by Denver. The Salt Lake City district office was elevated to a regional office during a reorganization in 2008.
[Read more: Here are the scams that brought the SEC to Utah — and kept it busy for decades.]
The closure also follows a high-profile victory for the Salt Lake SEC office, which obtained a $5 million settlement last year from The Church of Jesus Christ of Latter-day Saints and its investment arm, Ensign Peak Advisors. Its investigation — supervised by Combs and others — found that the investment firm did not properly disclose stock holdings and went to “great lengths” to “obscure” the church’s investment portfolio.
[Read more: Read for yourself what the SEC found in the LDS Church’s stock filings.]
Besides attrition, the SEC cited “organizational efficiency” in deciding to close Salt Lake, which it noted is the smallest of the regional offices. It said it has no plans to close any of the 10 other regional offices.
The closure is scheduled for later this year. The Denver office will then handle securities enforcement in Utah, according to the SEC’s news release.
The Salt Lake office employed “approximately” 20 personnel, the agency said, but declined to comment on other questions from The Salt Lake Tribune. Those staff will be “aligned” to other SEC components, the news release said.
Shannon Sollitt is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.