SEC General Counsel Dan Berkovitz to Depart Agency After Reportedly Dining with SBF

SEC General Counsel Dan Berkovitz to Depart Agency After Reportedly Dining with SBF

• SEC General Counsel Dan Berkovitz will depart the agency on January 31.
• He’ll be replaced by Megan Barbero, the SEC Principal Deputy General Counsel.
• Berkovitz joined the SEC in November of last year. Previously he worked as a Commissioner at the Commodity Futures Trading Commission (CFTC).
• Berkovitz is reported to have dined with Sam Bankman-Fried and other FTX executives last year when he was still a Commissioner at the CFTC.

The U.S. Securities and Exchange Commission (SEC) General Counsel Dan Berkovitz will be departing the agency, the SEC announced on Thursday.

Berkovitz will depart the SEC on January 31. He’ll be replaced by Megan Barbero, currently serving as Principal Deputy General Counsel.

"After thirty-four years of public service, it is time for me to pursue new and different challenges and opportunities," Berkovitz said. "It has been a tremendous honor and privilege to work with so many exceptionally talented and dedicated people throughout this agency to contribute to the success of SEC’s mission to enhance investor protection, strengthen our capital markets, and facilitate capital formation." Berkovitz started working at the SEC in November of last year. Before that he worked as a Commissioner at the Commodity Futures Trading Commission (CFTC) for three years. At both agencies, Berkovitz worked with the current SEC Chair Gary Gensler.

“I am grateful for Dan’s exceptional public service and his dedication to this agency,” said Gensler. “Dan has led the Office of General Counsel during a time in which we’ve proposed critical reforms throughout the capital markets. His counsel, judgment, and leadership have been invaluable to our work at the SEC. I have been blessed to work with Dan at two great market regulators, and I congratulate him for his 34 years in public service."

Dined with Sam Bankman-Fried

Berkovitz seems to have had an amicable relationship with Sam Bankman-Fried, the disgraced crypto mogul whose exchange FTX dramatically imploded last month.

The Washington Examiner reported that Berkovitz joined Bankman-Fried, FTX General Counsel Ryne Miller, and then-FTX President Brett Harrison for a dinner at a luxury Indian restaurant Rasika West End in October 2021.

At the time, Bankman-Fried was on a lobbying spree and Berkovitz served at the CFTC, one of the U.S. agencies that regulated crypto markets. While the exact details of their conversation are unknown, some reports state that Bankman-Fried wanted to influence CFTC to allow FTX users to borrow trading money.

Other reports indicate that Bankman-Fried frequently met with CFTC officials during his trips to Washington over the last year. Bankman-Fried seems to have been on a quest to make it easier for FTX to become the dominant player in the crypto markets.

Bankman-Fried was also known for his generous donations to the Democratic party. Reports indicate that he might have donated up to $40 million this political cycle.

However, the house of cards came crashing down this November, when it was revealed that Bankman-Fried’s FTX funneled up to $8 billion of customer funds to his hedge fund Alameda Research. FTX filed for bankruptcy on November 11.

A month later, with Bankman-Fried still in the Bahamas, the SEC, Department of Justice, and the CFTC charged the disgraced crypto mogul with eight counts, including wire fraud, money laundering, and conspiracy to commit fraud. If convicted, he’s facing a maximum penalty of 115 years in prison.

On the Flipside

• It’s unclear why precisely Berkovitz is leaving the SEC.
• It’s possible that Berkovitz’s departure is a forced one due to his ties to Bankman-Fried.

Why You Should Care

Berkovitz seems to have been in close contact with Bankman-Fried. His sudden departure right after Bankman-Fried got charged with fraud might raise questions among cryptocurrency advocates.

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