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Securities
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November 19, 2024
10th Circ. Mulls Constitutional Challenge To Securities Orgs
A three-judge panel of the Tenth Circuit on Tuesday heard arguments in a case challenging the constitutionality of the nation's largest securities clearing organizations, with the judges weighing whether they should stop the organizations from acting against a broker-dealer while the case is ongoing.
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November 19, 2024
Ex-Fed Examiner Cops To Insider Trading, Settles With SEC
A former senior banking supervisor with the Federal Reserve Bank of Richmond pled guilty Tuesday in Virginia federal court to insider trading, the same day he resolved the U.S. Securities and Exchange Commission's claims accusing him of inappropriately trading in shares of New York Community Bancorp and Capital One Financial Corp.
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November 19, 2024
Jury To Decide If Gemini's Bitcoin Statements Were False
A New York federal judge has found that crypto exchange Gemini Trust Co. was the "maker" of alleged misrepresentations to the Commodity Futures Trading Commission about its plans to offer bitcoin futures contracts, but a jury will have to decide if the statements were materially false or misleading.
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November 19, 2024
Dentons Atty Owed No Duty In $54M Currency Swap, Jury Told
A Hunton Andrews Kurth LLP partner on Tuesday defended the actions of a former Dentons attorney in a failed $54 million bolivar-to-dollars currency swap, telling jurors that she did not owe a duty to the Venezuelan attorney suing her for malpractice because she never represented him as his attorney.
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November 19, 2024
SEC's $196M Win Revived After Judge Fixes 'Scrivener's Error'
A Florida federal judge has granted a $196 million judgment against a group of fraudsters to the U.S. Securities and Exchange Commission after fixing what he called a "scrivener's error" in the original order that caused the Eleventh Circuit to overturn a part of the award in September.
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November 19, 2024
2 Firms To Rep Starbucks Investors Over 'Triple Shot' Strategy
Robbins Geller Rudman & Dowd LLP and Keller Rohrback LLP will represent a proposed class of investors in litigation alleging Starbucks made overly positive projections for its so-called Triple Shot Reinvention strategy, hurting investors when its actual financial results did not bear out its optimism.
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November 19, 2024
AI School Tech Founder Stole $10M From Investors, DOJ Says
The founder of AllHere Education Inc., a startup venture that sold artificial intelligence-powered chatbots to schools, is charged with fleecing investors out of nearly $10 million by lying about the company's revenue and using some of the money to pay for her wedding and a house, New York federal prosecutors announced Tuesday.
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November 19, 2024
Shaq Reaches $11M Deal With Astrals NFT Buyers
Hall of Fame basketball player Shaquille O'Neal and the creators of the Astrals nonfungible token project have agreed to pay $11 million to settle a proposed securities class action with buyers of the tokens that O'Neal allegedly promoted.
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November 19, 2024
Cravath-Led Robinhood To Acquire TradePMR In $300M Deal
Stock trading app Robinhood Markets Inc., advised by Cravath Swaine & Moore LLP, on Tuesday announced plans to buy registered investment adviser-focused custodial and portfolio management platform TradePMR, led by Stradley Ronon Stevens & Young LLP, in a cash-and-stock deal valued at $300 million.
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November 19, 2024
Undefined Terms Cinch Cloudera's Win In 'Cloudy' Fraud Suit
The Ninth Circuit on Tuesday upheld the dismissal of a proposed class action against Cloudera Inc. alleging the data management and analytics company duped investors into buying stock at artificially inflated prices, saying the suit didn't substantiate its falsity claims with clear definitions for terms like "cloud native."
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November 19, 2024
Cuban Bank Can't Block Fund's €72M Debt Claim
Cuba's former central bank can't block an offshore fund from suing it for over €72 million ($76.2 million) of unpaid sovereign debt because the lender authorized the assignment of the debt to the fund, a London appeals court ruled Tuesday.
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November 19, 2024
FDIC's Gruenberg To Exit On Eve Of Trump's Inauguration
The Federal Deposit Insurance Corp.'s embattled chairman, Martin Gruenberg, said Tuesday that he will step down and retire from the agency before President-elect Donald Trump takes office, clearing the way for a new, likely Republican leader at the deposit insurer.
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November 18, 2024
SEC Says Bogus Heir Of Nigerian Billionaire Ran IPO Scheme
A Queens, New York, man who copped to wire fraud for scamming investors by posing as scion of an ultra-wealthy Nigerian industrialist faces U.S. Securities and Exchange Commission claims over the same alleged misconduct.
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November 18, 2024
SEC Says Calif. Atty, His Wife Stole $2.2M To Buy House
The U.S. Securities and Exchange Commission on Monday accused a Los Angeles-area attorney of scheming to control publicly traded penny stock companies and then stealing $2.2 million from one of those companies to buy a home with his wife, according to a complaint filed in California federal court.
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November 18, 2024
Target Downs Investor Suit Over Inventory Glut For Good
A Minnesota federal judge has tossed for good a proposed class action alleging Target Corp. and its top executives misled shareholders by hiding that the big-box retailer had "abandoned its customer-focused purchasing strategy" in favor of "indiscriminately buying large quantities of inventory" that consumers did not want.
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November 18, 2024
Judge Won't Release Kraken To Appeal Order In SEC Suit
A California federal judge on Monday refused to let the operator of the cryptocurrency exchange Kraken make an immediate appeal of his order denying its motion to dismiss a suit brought by the U.S. Securities and Exchange Commission, saying it would only delay resolution of the case.
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November 18, 2024
Justices Urged To Pass On 3rd Circ. CFPB Loan Trust Case
The Consumer Financial Protection Bureau has asked the U.S. Supreme Court to deny an appeal by a group of student loan trusts fighting an enforcement action by the agency, arguing that industry concerns about the Third Circuit case are overblown and unavailing.
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November 18, 2024
Ex-AutoZone CEO Must Face $1M 'Short-Swing' Profit Suit
A Tennessee federal judge said a former AutoZone Inc. CEO must face an investor suit seeking to recover over $1 million in alleged "short-swing" trading profits on behalf of the company, saying the shareholder has plausibly alleged that the ex-CEO's trades were not exempt from certain insider trading rules.
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November 18, 2024
Industry Group Wants Trump-Era SEC Proxy Rules Reinstated
The National Association of Manufacturers has urged the D.C. Circuit to reverse a ruling that struck down a U.S. Securities and Exchange Commission regulation on proxy voting, arguing the ruling severely limits the agency's regulatory power without any statutory backing.
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November 18, 2024
J&J Posts $1.17B Bond For Del. Merger Milestone Appeal
Johnson & Johnson Inc. has posted a $1.167 billion surety-backed bond ahead of its planned appeal challenging a Delaware Chancery Court's finding that it owes more than $1 billion to a medical robotics developer's former shareholders caught up in a post-acquisition dispute.
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November 18, 2024
Ex-Crypto CEO Bribe Case Unsealed As Firm Inks $10M Deal
The former CEO of a cryptocurrency mining company tried to bribe Japanese government officials to be able to open a resort in the country, according to an indictment unsealed Monday alongside the company's $10 million deferred prosecution agreement.
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November 18, 2024
Hacker's Wife Gets 18 Months For Laundering Stolen Crypto
The wife of a hacker who stole what is now billions of dollars' worth of bitcoin from the crypto exchange Bitfinex was sentenced in D.C. federal court Monday to 18 months in prison for her role in helping to launder the stolen funds.
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November 18, 2024
Mutual Fund Manager Owes SEC, CFTC $11M After Trial
A Wisconsin federal judge has ordered the operator of a mutual fund to pay more than $11 million to the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission after being found liable by a jury of making untrue statements and breaching his fiduciary duty to investors.
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November 18, 2024
StraightPath Execs Must Face $386M IPO Fraud Charges
A New York federal judge denied a bid Monday by three principals of Florida-based private equity firm StraightPath Venture Partners to dismiss an indictment accusing them of raising $386 million by defrauding over 2,000 investors through false promises about purchases of pre-IPO shares in private companies.
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November 18, 2024
SEC Sued Over FINRA's One-Day Bond Reporting Timeline
The U.S. Securities and Exchange Commission has been hit with a lawsuit seeking to overturn a newly adopted rule that will require brokerage firms to report bond transactions more quickly, with the suing organization previously claiming there was no evidence justifying a need for such a change.
Expert Analysis
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Amid SEC Rule Limbo, US Cos. Subject To ESG Regs In EU
Though the U.S. Securities and Exchange Commission is facing legal challenges to its climate-disclosure rulemaking, the implementation of the Corporate Sustainability Reporting Directive in the European Union will force U.S. companies to comply with exactly the kinds of ESG disclosures that are not yet mandated in the U.S., say attorneys at Squire Patton.
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How Law Firms Can Avoid 'Collaboration Drag'
Law firm decision making can be stifled by “collaboration drag” — characterized by too many pointless meetings, too much peer feedback and too little dissent — but a few strategies can help stakeholders improve decision-making processes and build consensus, says Steve Groom at Miles Mediation.
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6 Considerations To Determine If A Cyber Incident Is Material
The U.S. Securities and Exchange Commission's recent guidance on material cybersecurity incidents covers a range of ransomware scenarios, from a company paying a sum and regaining operations to recovering payment via cyberinsurance, but makes it clear that no single factor determines whether a cybersecurity incident is material, say attorneys at Troutman Pepper.
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Opinion
Litigation Funding Disclosure Key To Open, Impartial Process
Blanket investor and funding agreement disclosures should be required in all civil cases where the investor has a financial interest in the outcome in order to address issues ranging from potential conflicts of interest to national security concerns, says Bob Goodlatte, former U.S. House Representative for Virginia.
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Carbon Offset Case A Win For CFTC Enviro Fraud Task Force
An Illinois federal court's decision in Commodity Futures Trading Commission v. Ikkurty — earning the CFTC a sizeable monetary award that will likely incentivize similar enforcement pursuit — shows the impact of the commission's Environmental Fraud Task Force, say attorneys at Steptoe.
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RealPage Suit Shows Growing Algorithm, AI Pricing Scrutiny
The U.S. Department of Justice's suit against RealPage for helping fix rental rates, filed last week, demonstrates how the use of algorithmic and artificial intelligence tools to assist with pricing decisions is drawing increasing scrutiny and action across government agencies, and specifically at the Federal Trade Commission and the DOJ, say Andre Geverola and Leah Harrell at Arnold & Porter.
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Whistleblowers Must Note 5 Key Differences Of DOJ Program
The U.S. Department of Justice’s recently unveiled whistleblower awards program diverges in key ways from similar programs at other agencies, and individuals must weigh these differences and look first to programs with stronger, proven protections before blowing the whistle, say Stephen Kohn and Geoff Schweller at Kohn Kohn.
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What NFL Draft Picks Have In Common With Lateral Law Hires
Nearly half of law firm lateral hires leave within a few years — a failure rate that is strikingly similar to the performance of NFL quarterbacks drafted in the first round — in part because evaluators focus too heavily on quantifiable metrics and not enough on a prospect's character traits, says Howard Rosenberg at Baretz+Brunelle.
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Foreign Threat Actors Pose Novel Risks To US Tech Cos.
A recent bulletin jointly issued by several U.S. intelligence agencies warns technology startups and the venture capital community about national security risks posed by foreign threat actors, so companies interested in raising foreign capital should watch for several red flags, say Robert Friedman and Jacob Marco at Holland & Knight.
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Open Questions 3 Years After 2nd Circ.'s Fugitive Ruling
The Second Circuit’s 2021 decision in U.S. v. Bescond, holding that a French resident indicted abroad did not meet the legal definition of a fugitive, deepened a circuit split on the fugitive disentitlement doctrine, and courts continue to grapple with the doctrine’s reach and applicability, say attorneys at Lankler Siffert.
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Replacing The Stigma Of Menopause With Law Firm Support
A large proportion of the workforce is forced to pull the brakes on their career aspirations because of the taboo surrounding menopause and a lack of consistent support, but law firms can initiate the cultural shift needed by formulating thoughtful workplace policies, says Barbara Hamilton-Bruce at Simmons & Simmons.
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Class Actions At The Circuit Courts: August Lessons
In this month's review of class action appeals, Mitchell Engel at Shook Hardy considers certification cases touching on classwide evidence of injury from debt collection practices, defining coupon settlements under the Class Action Fairness Act, proper approaches for evaluating attorney fee awards in class action settlements, and more.
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Crypto Regs Could See A Reset Under The Next President
Donald Trump has taken a permissive policy stance favoring crypto, while Kamala Harris has been silent on the issue, but no matter who wins the presidential election, we may see a more lenient regulatory climate toward the digital currency than from the Biden administration, says Liam Murphy at McKool Smith.
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Planning Law Firm Content Calendars: What, When, Where
During the slower month of August, law firms should begin working on their 2025 content calendars, planning out a content creation and distribution framework that aligns with the firm’s objectives and maintains audience engagement throughout the year, says Jessica Kaplan at Legally Penned.
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Key Concerns To Confront In FDIC Brokered Deposit Proposal
Banks and fintech companies should note several fundamental issues with the Federal Deposit Insurance Corp.'s recent proposal to widen how it classifies brokered deposits, an attempt to limit prudential risk that could expose the industry and underbanked consumers who rely on bank-fintech apps to widespread unintended consequences, say attorneys at Gibson Dunn.