As has been widely reported, last week, the SEC, CFTC, and U.S. Attorney’s Office (“USAO”) for the Southern District of New York (“SDNY”) announced charges against Samuel Bankman-Fried (“SBF”), the co-founder and majority owner of FTX Trading Ltd. (“FTX”), a...

On Thursday, December 8, 2022, the Securities and Exchange Commission (“SEC”) published a notice to its website informing companies of their potential disclosure obligations regarding their crypto assets.[1] The notice contains a “sample letter”, laying out questions the agency may...

On November 7, 2022, the U.S. Supreme Court heard oral arguments in the cases of SEC v. Cochran[1] and Axon Enterprise, Inc. v. FTC,[2] which address whether respondents in federal administrative proceedings have the ability to pose constitutional challenges to...

In March 2022, as it does every year, the Securities and Exchange Commission’s Division of Examinations (EXAMS) published its Examination Priorities, designed to highlight areas that the Agency views to be worthy of heightened scrutiny. Among these, EXAMS included “Emerging...

Partner Greg Baker was quoted in an article from Crowdfund Insider relating to the recent SEC enforcement action against celebrity/influencer Kim Kardashian. The following is an excerpt from the article: “Yesterday, as was widely reported, well-known celebrity and influencer Kim Kardashian settled an enforcement action...

On July 15, 2022, the United States Court of Appeals for the Second Circuit affirmed the dismissal by the United States District Court for the Southern District of New York of a Securities and Exchange Commission (“SEC”) enforcement action alleging...

This summer, the U.S. Attorney’s Office for the Southern District of New York broke new ground in its oversight of fraud involving digital assets when it brought charges against Nathaniel Chastain related to an insider trading scheme involving non-fungible tokens...

On June 29, 2022, the Securities and Exchange Commission (the “Commission”) rejected a proposed rule change submitted by NYSE Arca, Inc. (the “Exchange”) that would have allowed it to list and trade shares of Grayscale Bitcoin Trust (“GBTC”), the largest...

Each year, the U.S. Securities and Exchange Commission (SEC) publishes its enforcement priorities – a reminder that, although the Division of Examinations (EXAMS) remains committed to monitoring compliance with (and penalizing violations of) all regulations, the Agency recognizes that risks...

On June 6, 2022, U.S. Senator Kirsten Gillibrand of New York and U.S. Senator Cynthia Lummis of Wyoming proposed federal regulation of digital assets in the Responsible Financial Innovation Act (“RFIA”).[1] The RFIA provides a definition of digital assets and...

On April 21, 2022, the United States Court of Appeals for the Fourth Circuit affirmed the dismissal by the United States District Court for the District of Maryland of allegations that Marriott International had violated federal securities laws by omitting...

On April 27, 2022, the SEC filed suit against family office Archegos Capital Management, LP, as well as its Founder/Owner Sung Kook (Bill) Hwang, CFO Patrick Halligan, Head Trader William Tomita, and Chief Risk Officer Scott Becker with orchestrating a...

A pair of recent legal developments cast doubt on the long term ability of the Securities and Exchange Commission (“SEC”) to try contested actions before the agency’s in-house administrative law judges (“ALJ”).  First, the Supreme Court accepted a petition to...

On September 14, 2021, the SEC announced it had reached a settlement with “a leading alternative data provider,” App Annie, and its co-founder and CEO, Bertrand Schmitt, to settle securities fraud charges related to their alleged deceptive practices and material...

On March 28, 2022, the Securities and Exchange Commission announced proposed changes to Exchange Act Rules that would expand the scope of which market participants the SEC considers to be a “dealer” or “government securities dealer.”[1] Most investors would notice no...

Recently, the Securities and Exchange Commission (“SEC”) proposed a new rule concerning the disclosure of “certain climate-related information in their registration statements and annual reports” as well as “certain climate-related financial metrics . . . in a registrant’s audited financial statements.”[1]  If...

NFTs, or “non-fungible tokens,” are in the headlines.  Artists, politicians, and celebrities, along with everyday internet users, have been selling and trading various forms of the digital asset, sometimes earning millions of dollars from the sales.  But how do NFTs...

Non-fungible tokens (NFTs) are the latest trend to sweep markets from the art industry to professional sports leagues. These digital assets have existed for several years but have achieved explosive popularity only recently. In fact, the global market for NFTs reportedly...

The full-scale invasion of Ukraine by a revanchist Russia continues to dominate headlines as the war enters its second month. While the sometimes-terrible choices facing those living in the conflict zone are unparalleled, investors around the world also have choices...

In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which required the SEC “to prescribe rules to make certain short sale data publicly available no less than monthly.”[1]  On February 25, 2022, the SEC acted to...

On June 29, 2021, a major cryptocurrency exchange (the “Crypto Exchange”) announced a new program called “Lend” in which it proposed offering customers a 4% interest rate on cryptocurrency tied to USD.[1] But on September 7, 2021, the Crypto Exchange...

Securities class action case filings plunged in 2021 compared to the number of similar cases filed in 2020.  According to Cornerstone Research’s 2021 Year in Review report, there were 218 securities class action cases filed in federal and state courts...

On June 21, 2021, the Supreme Court issued an opinion by Justice Barrett on the reliance element of a securities fraud claim.[1]  In a unanimous portion of her opinion (the “Decision”), Justice Barrett held that courts may consider the generic...

A California Court recently allowed the Securities and Exchange Commission (the “SEC” or “Commission”) to proceed with its first insider trading prosecution based on a theory of “shadow trading.”[1] On January 14, 2022, Judge William H. Orrick, sitting in the...

A key question for any company considering the issuance of cryptocurrency is whether that digital asset will be treated by regulators as a security, like BP stock, or a commodity, like Bitcoin.[i]  In 2019, the Securities and Exchange Commission (the...

In 2021, there were 613 initial public offerings (“IPOs”) of Special Purpose Acquisition Companies (“SPACs”), after 248 SPACs went public in 2020 and 59 in 2019.[1]  Prior to 2021, there had not been more than 500 IPOs of any kind...

On November 18, 2021, the Securities and Exchange Commission (the “Commission”) released its Enforcement Results for fiscal year (“FY”) 2021, which spans from October 1, 2020 to September 30, 2021.  The Commission published its results in an abbreviated press-release format...

When it comes to settlements with the SEC’s Division of Enforcement (“Enforcement Division”), a question respondents often ask is how the SEC arrives at a given penalty amount?  This blog post will discuss the SEC’s current approach to determining penalty...

Last summer, Representative Alexandria Ocasio-Cortez (D-NY) introduced bill H.R. 4620 to limit the exemption from registration requirements applicable to certain family offices under the Investment Advisers Act of 1940 (the “Advisers Act”).  If the bill becomes law, among other things,...

Last month, we wrote about three actions taken by the SEC signaling a renewed interest in cybersecurity disclosure enforcement.  In keeping with this theme, the SEC announced a number of significant new cybersecurity actions just last week.  On August 30, the SEC...

The SEC is ramping up its cybersecurity disclosure enforcement.  While the agency had made significant efforts relating to cybersecurity disclosure previously, there has been surprisingly little SEC activity in this area since 2018—even though the last three years has seen...