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Securities
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December 04, 2024
CFTC Hits $17.1B Enforcement Record With FTX-Linked Deals
The Commodity Futures Trading Commission secured a record annual enforcement haul of more than $17.1 billion in fiscal year 2024, including a historic $12.7 billion judgment against failed crypto exchange FTX and its affiliated trading firm Alameda Research, the agency announced Wednesday.
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December 04, 2024
5th Circ. Probes $8M Payout For Allegedly Undelivered Services
An investment company on Wednesday found itself before the Fifth Circuit having to justify paying $7.7 million for allegedly undelivered services from an affiliate, as it appeals a $2.6 million bill it got hit with for prematurely ending a contract.
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December 04, 2024
Starbucks Brass Face Derivative Suit Over 'Reinvention' Flop
Officers and directors of coffee chain Starbucks are facing shareholder derivative claims over the company's so-called Triple Shot Reinvention strategy after the company disappointed the markets in April with updates about the plan.
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December 04, 2024
Developer, Michigan Differ On State, Federal Securities Tests
A Michigan Supreme Court justice on Wednesday pressed the state's securities administrator and a developer over how Michigan businesses and residents could be affected if the high court were to decide that a state law test rather than a federal one should be used to determine if a promissory note is a security.
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December 04, 2024
Uber Investors' Attys Awarded $58M In $200M IPO Suit Deal
A California federal judge granted final approval Wednesday to Uber's $200 million deal settling class claims from investors accusing it of making false and misleading statements ahead of its initial public offering, and also awarded $58 million for attorney fees that he called quite "substantial" but "warranted."
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December 04, 2024
SEC Taps New Co-Leaders For Crypto Enforcement Unit
The U.S. Securities and Exchange Commission has promoted the assistant director of its crypto and cyber enforcement unit and a counsel to an outgoing Democratic commissioner to co-lead the regulator's crypto enforcement efforts ahead of a coming administration shake-up that could change the agency's approach to the digital asset industry.
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December 04, 2024
Wells Fargo Wants Suits Over $300M Scheme Tossed
Wells Fargo Bank NA urged a Florida federal judge on Wednesday to toss both a proposed class action and a receiver's lawsuit claiming the bank aided and abetted a $300 million Ponzi scheme that duped more than 1,000 investors, arguing that neither pleading sufficiently shows that Wells Fargo knew about the fraud.
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December 04, 2024
Viks' Bid To Duck Bank May Hinge On Norway Orders
A Connecticut state court judge noted repeatedly on Wednesday that Deutsche Bank AG has not provided her with copies of Norwegian judgments to undergird its argument that billionaire Alexander Vik and his daughter tortiously harmed the value of an asset sale, but the bank said the material is not necessary to let its lawsuit escape summary judgment.
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December 04, 2024
Del. Justices Skeptical $2.4B SPAC Deal Misled Investors
Delaware Supreme Court justices pressed a stockholder attorney on Wednesday to explain how the blank-check company that took electric vehicle venture Canoo Holdings Ltd. public in a $2.4 billion deal breached its duties by failing to reveal information it purportedly had yet to receive.
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December 04, 2024
Legal Clouds Part For 2 Who Assisted In Cannabis Fraud Case
A Manhattan federal judge on Wednesday allowed a pair of New Jersey business partners to avoid prison for aiding in a scheme to siphon portions of $14 million raised for a cannabis-infused consumer products company, crediting their cooperation with prosecutors.
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December 04, 2024
Pot Co. Investors Get Another Shot At Securities Suit
A New York federal judge has given a group of investors another chance to pursue claims that Cronos Group Inc. misled backers about its financial benchmarks, saying allegations stemming from a U.S. Securities and Exchange Commission settlement could be enough for the claims to survive.
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December 04, 2024
Crypto Groups Hail Trump's SEC Pick Paul Atkins
President-elect Donald Trump on Wednesday said he will nominate former U.S. Securities and Exchange Commission member Paul Atkins to lead the agency next year, a decision that cryptocurrency advocates praised as opening a path for greater acceptance of an industry that has faced a slew of lawsuits under the current SEC.
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December 04, 2024
Steptoe Vet Will Lead Troutman Pepper's Sanctions, Trade Group
Troutman Pepper Hamilton Sanders LLP has hired a longtime Steptoe LLP lawyer to lead its sanctions and trade controls team in Washington, D.C., as the local lateral market continues responding to the coming change in political control in the nation's capital.
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December 04, 2024
Calif. Trading Instructor Gets Prison For $2M Investment Fraud
A North Carolina federal judge sentenced a California man extradited from Australia to face charges over a $2 million investment fraud scheme he orchestrated to 70 months in prison and ordered him to pay $1.9 million in restitution, federal prosecutors in the Tar Heel State announced.
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December 03, 2024
Top Ex-SEC Officials Warn Of Enforcement Upheaval
Former top U.S. Securities and Exchange Commission officials on Tuesday predicted a sea change in the agency's enforcement approach in the coming second administration of President-elect Donald Trump, with a lighter touch for corporate wrongdoers and a whole new ballgame with respect to cryptocurrency.
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December 03, 2024
Investor Attys Seek $6.6M Cut Of $20M Metal Price-Fixing Deal
Attorneys for investors settling platinum and palladium price-fixing claims against Goldman Sachs and others for $20 million have asked a New York federal judge to award them fees equivalent to a third of the settlement amount, or more than $6.6 million, a below-lodestar request that they said is, "clearly, not a windfall situation."
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December 03, 2024
Crypto Co. Hut 8 Wants Out Of Merger Disclosure Investor Suit
Crypto mining company Hut 8 moved to dismiss a proposed shareholder class action that is based on the claims of a short-seller's report that Hut 8 overpaid for a company with severe operational issues, saying the suit does not show the alleged misrepresentations were false or misleading when made or that investors were actually harmed.
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December 03, 2024
Customers Bancorp Hid AML Shortcomings, Investor Suit Says
Bank holding company Customers Bancorp Inc. faces a shareholder suit in Pennsylvania federal court alleging it failed to disclose shortcomings in its anti-money laundering compliance, causing shares to decline when the Federal Reserve and state banking authorities brought enforcement actions tied to the lender's work with crypto firms.
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December 03, 2024
Coinbase Says It Won't Use Firms That Hire Crypto Enforcers
Cryptocurrency exchange Coinbase made clear that it won't work with law firms that employ former U.S. Securities and Exchange Commission attorneys who led the charge on crypto enforcement suits, singling out Milbank LLP for its hiring of ex-SEC enforcement director Gurbir Grewal.
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December 03, 2024
Del. Justices Mostly Uphold Mindbody Merger Suit Ruling
Delaware's Supreme Court has upheld a Court of Chancery ruling that the former CEO of Mindbody Inc. is liable for an extra $1 per share plus interest to stockholders of the fitness software company but reversed the lower court's finding that Vista Equity Partners Management LLC, which acquired Mindbody in 2019, aided and abetted the executive.
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December 03, 2024
Unit Of World's Largest Bank Avoids SEC Penalty In Cyber Case
A broker-dealer subsidiary of the Industrial and Commercial Bank of China will escape civil penalties in a settlement with the U.S. Securities and Exchange Commission over its books and records because of the firm's remediation and cooperation, the agency says.
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December 03, 2024
SEC Says Biopharma's Cooperation Helped It Avoid Penalty
A Houston biopharmaceutical company accused of misleading investors about the regulatory status of two cancer drugs agreed to settle the U.S. Securities and Exchange Commission's action against it on Tuesday without paying a dime, in recognition of what the SEC said was the company's self-reporting and cooperation with investigators.
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December 03, 2024
ZoomInfo Brass Face COVID Customer Loss Derivative Suit
Leaders of software company ZoomInfo Technologies Inc. face new shareholder derivative action claims over the company's allegedly improper customer retention measures following its $33 million write-down in connection with the matter.
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December 03, 2024
Chancery Orders Revenue Trust For Healthcare Co. 'Poaching'
A home health company formed through secret poaching by an allegedly disloyal former CEO, two officers and two private equities has been ordered to earmark much of its future revenue to a trust for the corporate victims, in a Delaware Court of Chancery ruling that described the subterfuge as "stunning."
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December 03, 2024
Judge Denies News Orgs. Bid To Unseal FTX Customer Names
A Delaware federal judge on Tuesday said he wouldn't reverse an order allowing defunct crypto platform FTX Trading Ltd. to keep customer names out of public bankruptcy filings, rejecting an appeal from major news outlets to unseal the information and writing that sealing the information preserved FTX's assets and protected creditors from cybercrime.
Expert Analysis
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Crypto.com's Suit Against SEC Could Hold Major Implications
Crypto.com's recent lawsuit against the U.S. Securities and Exchange Commission could affect the operation and regulation of crypto markets in the U.S., potentially raising more questions about the SEC's authority to regulate the industry when it's unclear whether another agency is ready to assume it, say attorneys at McGuireWoods.
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Opinion
Judicial Committee Best Venue For Litigation Funding Rules
The Advisory Committee on Civil Rules' recent decision to consider developing a rule for litigation funding disclosure is a welcome development, ensuring that the result will be the product of a thorough, inclusive and deliberative process that appropriately balances all interests, says Stewart Ackerly at Statera Capital.
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The Strategic Advantages Of Appointing A Law Firm CEO
The impact on law firms of the recent CrowdStrike outage underscores that the business of law is no longer merely about providing supplemental support for legal practice — and helps explain why some law firms are appointing dedicated, full-time CEOs to navigate the challenges of the modern legal landscape, says Jennifer Johnson at Calibrate Strategies.
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Don't Phone A Friend: Disclosing Friendships With Executives
The U.S. Securities and Exchange Commission's recent settlement against a former Church & Dwight chairman for violating proxy disclosure rules by neglecting to disclose his friendship with an executive officer amid a CEO search illustrates the perils of relying solely on responses to questionnaires circulated to boards, say attorneys at BCLP.
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Why Diversity Jurisdiction Poses Investment Fund Hurdles
Federal courts' continued application of the exacting rules of diversity jurisdiction presents particular challenges for investment funds, and in the absence of any near-term reform, those who manage such funds should take action to avoid diversity jurisdiction pitfalls, say attorneys at Sher Tremonte.
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The Ups And Downs Of SEC's Now-Dissolved ESG Task Force
The U.S. Securities and Exchange Commission's Climate and ESG Enforcement Task Force, which was quietly disbanded sometime over the summer, was marked by three years of resistance from some stakeholders to ESG regulation, a mixed record in the courts and several successful enforcement actions, say attorneys at Crowell & Moring.
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Series
Beekeeping Makes Me A Better Lawyer
The practice of patent law and beekeeping are not typically associated, but taking care of honeybees has enriched my legal practice by highlighting the importance of hands-on experience, continuous learning, mentorship and more, says David Longo at Oblon McClelland.
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Opinion
It's Time To Sound The Alarm About Lost Labor Rights
In the Fifth Circuit, recent rulings from judges appointed by former President Donald Trump have dismantled workers’ core labor rights, a troubling trend that we cannot risk extending under another Trump administration, say Sharon Block and Raj Nayak at the Center for Labor and a Just Economy.
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SEC Fine Shows Risks Of Nonpublic Info In X, LinkedIn Posts
The U.S. Securities and Exchange Commission recently announced a settlement with DraftKings over charges arising from posting material nonpublic information on the CEO's social media accounts, highlighting that information posted to company websites and social media sites does not automatically qualify as "publicly disclosed" for purposes of Regulation FD, say attorneys at O'Melveny.
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Anticipating Jarkesy's Effect On Bank Agency Enforcement
Following the U.S. Supreme Court’s decision in U.S. Securities and Exchange Commission v. Jarkesy, federal courts may eventually issue decisions on banking law principles and processes that could fundamentally alter the agencies' enforcement action framework, and the relationship between banks and examiners, says Brendan Clegg at Luse Gorman.
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CFTC Anti-Fraud Blitz Is A Warning To Carbon Credit Sellers
With its recent enforcement actions against a carbon offset project developer and its senior executives for reporting false information about the energy savings of the company's projects, the Commodity Futures Trading Commission is staking out its position as a primary regulator in the voluntary carbon credit market, say attorneys at Morgan Lewis.
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Unpacking State AG Approaches To Digital Asset Enforcement
Attorneys at Cozen O'Connor survey recent digital asset enforcement by attorneys general nationwide driven by concerns over regulatory gaps where technological developments and market changes have outpaced legislation.
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3 Takeaways From Navy Shipbuilder's Fraud Guilty Plea
Austal USA’s recent plea agreement over accounting fraud charges highlights for other companies the benefits of cooperating with government investigations, the challenges posed by senior executives’ involvement in misconduct, and the high stakes for defense contractors, say Michael DeBernardis and Shayda Vance at Hughes Hubbard.
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Opinion
Legal Institutions Must Warn Against Phony Election Suits
With two weeks until the election, bar associations and courts have an urgent responsibility to warn lawyers about the consequences of filing unsubstantiated lawsuits claiming election fraud, says Elise Bean at the Carl Levin Center for Oversight and Democracy.
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Peeling Back The Layers Of SEC's Equity Trading Reforms
The U.S. Securities and Exchange Commission's recently adopted amendments lowering the tick sizes for stock trading and reducing access fee caps will benefit investors and necessitate broad systems changes — if they can first survive judicial challenges, say attorneys at Sidley.