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Securities
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May 03, 2024
Sentencing Delayed For Ex-Fintech Exec In Crypto Case
Sentencing for the CEO of fintech company Hydrogen Technology Corp. was delayed Friday after a dispute over how to calculate the amount of money lost in the conspiracy to manipulate the market for Hydrogen's digital assets.
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May 03, 2024
3rd Circ. Clarifies Review Standard For Derivative Suits
In a precedential ruling Friday declining to revive Cognizant Technology investors' derivative claims over a bribery scandal, the full Third Circuit held that the best way to review such cases on appeal was from the beginning, not giving deference to the lower court's decision or considering whether there was an abuse of discretion.
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May 03, 2024
SoFi Unit To Pay FINRA $1.1M To Settle Customer ID Claims
SoFi Securities has agreed to pay $1.1 million to settle Financial Industry Regulatory Authority claims that it lacked a suitable user verification process for the firm's cash management brokerage business, allowing the opening of 800 accounts used by third parties to illegally transfer $8.6 million from other financial institution accounts.
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May 03, 2024
Chancery OKs Record-Breaking $100M Pattern Energy Deal
A $100 million settlement ending state and federal court litigation over Pattern Energy Group Inc.'s $6.1 billion go-private sale in 2020 got the nod from Delaware's Court of Chancery on Friday, along with a requested $26 million fee award and two $25,000 incentive awards for the lead shareholder plaintiffs.
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May 03, 2024
Tech Security Firm Founder Sues Buyer For Legal Fees In Del.
The founder of security and information technology service venture Counter Threat Solutions sued the company that acquired it for legal fee advancement in Delaware's Court of Chancery, after accusing the buyer in a Delaware Superior Court suit of fabricating post-closing indemnity claims and refusing to honor payment terms.
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May 03, 2024
Brothers Accuse Cos. Of Mishandling $1.1M EB-5 Investments
Two brothers from India sued companies behind a combination residential-resort project they invested in under the EB-5 investor visa program, telling a Florida federal court that their green card petitions were denied because the companies mishandled their $1.1 million investment.
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May 03, 2024
No Retrial Coming After $20M Cannabis Investor Verdict
A Los Angeles judge has denied a bid by CADM Inc. for a retrial following a $20 million verdict against it and its affiliates on claims that they defrauded investors with a real estate scheme, finding that the motion was not served to the proper attorneys on time, and even if it had been, the judgment would stand.
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May 03, 2024
Kwok's Ex-Chief Of Staff Pleads Out Before $1B Fraud Trial
The former chief of staff to exiled Chinese billionaire Ho Wan Kwok pled guilty in Manhattan federal court on Friday to participating in a $1 billion investor fraud, less than three weeks before she was scheduled to go to trial alongside her erstwhile boss.
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May 03, 2024
SEC Fines Trump Media's Audit Firm For 'Massive Fraud'
The U.S. Securities and Exchange Commission said on Friday that it has fined and permanently suspended the public accounting firm of former President Donald Trump's social media company for allegedly running a "sham auditing mill" by failing to meet industry standards in reviewing the financial statements of hundreds of clients.
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May 02, 2024
Whistleblower Claims Would 'Destroy' Autonomy, GC Was Told
Autonomy's former U.S. general counsel testified Thursday in the criminal fraud trial of former CEO Michael Lynch that the company's chief operating officer didn't want a whistleblower's claims to get into court, telling him that while the "law" was on their side, "the facts look bad" and would "destroy Autonomy."
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May 02, 2024
SEC Lands $25M Judgment In TikToker-Wannabe Ponzi Suit
A South Carolina man and his companies must pay the U.S. Securities and Exchange Commission nearly $24.9 million to settle claims that he misappropriated investors' money to make Ponzi payments to earlier investors and to pay for luxury cars and over $1 million to TikTok creators, according to judgments issued in Georgia federal court.
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May 02, 2024
Ex-JPM Trader Slams DOJ's 'Rank Opportunism' In Doc Suit
A former JPMorgan Chase & Co. foreign exchange trader is pressing a D.C. federal court to order the release of investigative material from the government's failed market manipulation criminal case against him, saying the U.S. Department of Justice's arguments against disclosure amount to "rank opportunism."
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May 02, 2024
Masimo Hit With Derivative Suit Over Audio Co. Acquisition
The top brass at medical device company Masimo Corp. has been hit with a shareholder derivative action claiming they harmed the company and "confused" investors by pushing through a $1 billion acquisition of an audio equipment company, allegedly causing a steep drop in stock prices and a $5.1 billion market capitalization loss.
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May 02, 2024
Tech, Finance Experts Urge CFTC To Consider AI Regs
Tech advisers urged the U.S. Commodity Futures Trading Commission on Thursday to consider policies to manage the risks associated with artificial intelligence, along with a list of other recommendations detailing potential approaches to the growing use of AI in financial markets.
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May 02, 2024
Attys Due For Spam Suit Sanction, But Not $750K, Judges Say
Class counsel's misconduct in helping instigate a spam text suit against stock-trading app Robinhood Financial LLC warranted sanctions, a Washington state appeals court panel ruled Thursday, but the judges said the $750,000 penalty went over the top in deterring the bad behavior.
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May 02, 2024
Microsoft, Activision Seek Del. Court Patch For $68.7B Sale
Microsoft Corp. and Activision Blizzard petitioned Delaware's Court of Chancery on Thursday for an order validating Activision's already closed but officially "defective" $68.7 billion sale agreement, arguing that the court pointed the two companies to a "solution for missteps in Delaware's General Corporation Law.
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May 02, 2024
Chancery Ruling Plays Role In Tesla's S&P Governance Grade
Business rating agency Standard & Poor's has revised downward to "moderately negative" electric vehicle company Tesla Inc.'s grade for management and governance, pointing in part to CEO Elon Musk's dominant role, and the company's "uncommonly high" risk from lawsuits, including the Delaware Chancery Court's recent scuttling of his $56 billion pay plan.
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May 02, 2024
ADM Investor Says Brass Misled About Growth, SEC Probe
The current and former top brass of food processing company Archer-Daniels-Midland were hit with a derivative suit in Delaware federal court alleging they provided false information to investors about the company's growth and failed to disclose a U.S. Securities and Exchange Commission's investigation into its nutrition business.
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May 02, 2024
DOL Hit With First Lawsuit Over New Investment Advice Regs
The U.S. Department of Labor was hit with a lawsuit Thursday in Texas federal court seeking to invalidate recently finalized regulations that broaden who qualifies as a fiduciary under the Employee Retirement Income Security Act, marking the first-filed legal challenge since the agency's late-April final release.
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May 02, 2024
Ex-FTX Boss Ryan Salame To Give Up $5.9M Bahamas House
Ryan Salame, the former co-chief executive of FTX Digital Markets, an affiliate of bankrupt cryptocurrency exchange FTX Trading Ltd., has agreed to transfer a $5.9 million house he owns in the Bahamas to FTX in lieu of paying the firm restitution over fraudulent political donations, according to a Wednesday motion.
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May 02, 2024
Discover Ups Liability Costs For Card Pricing Issue To $1.2B
Discover Financial Services has put a $1.2 billion price tag on remediation for its previously disclosed credit card pricing misclassification, which is now the subject of a U.S. Securities and Exchange Commission investigation, representing an increase of nearly 230% from the $365 million liability it recorded nearly a year ago.
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May 02, 2024
Securities Firm Must Face Ex-Worker's Age Bias Suit
A Colorado federal judge refused to throw out a lawsuit a former securities sales representative lodged against a firm accusing it of firing him and replacing him with two younger workers, saying he put forward enough detail to keep his suit afloat.
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May 02, 2024
Davis Wright Brings On MoFo Appellate Litigator In San Fran
Davis Wright Tremaine LLP has brought on a former Morrison Foerster LLP partner in San Francisco, strengthening its appellate practice with an experienced appellate litigator who clerked for a U.S. Supreme Court justice, a California Supreme Court justice and other judges, the firm announced Thursday.
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May 02, 2024
Snell & Wilmer Adds Armstrong Teasdale Tech Pro In Denver
Snell & Wilmer LLP's Denver outpost has added a new transactional partner to its corporate and securities team, bringing with him 18 years of experience including co-founding the technology transactions group for Armstrong Teasdale LLP and leading its technology industry group.
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May 02, 2024
Sullivan & Cromwell Creates National Security Practice Group
Sullivan & Cromwell LLP has launched a national security practice to help clients with matters stemming from the increased use of economic sanctions, anti-money laundering laws, the Foreign Corrupt Practices Act, foreign investment regulations, export controls and import restrictions, the firm said Thursday.
Expert Analysis
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ERISA Litigation Faces New Frontiers In 2024
As plaintiffs firms explore novel theories for recovery and the Department of Labor attempts to broaden the definition of an investment advice fiduciary, 2024 could see new types of Employee Retirement Income Security Act litigation after just 100 class actions were filed last year, say attorneys at Groom Law.
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Del. Ruling Guides On Advance Notice Bylaw Amendments
The Delaware Chancery's Court's recent denial of investment fund Paragon Technologies' injunction motion against Ocean Power Technologies underscores the importance of carefully crafting and enforcing corporate advance notice bylaw amendments, especially in light of universal proxy rules, say attorneys at Venable.
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Series
Baking Bread Makes Me A Better Lawyer
After many years practicing law, and a few years baking bread, I have learned that there are a few keys to success in both endeavors, including the assembly of a nourishing and resilient culture, and the ability to learn from failure and exercise patience, says Rick Robinson at Reed Smith.
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Federal Courts And AI Standing Orders: Safety Or Overkill?
Several district court judges have issued standing orders regulating the use of artificial intelligence in their courts, but courts should consider following ordinary notice and comment procedures before implementing sweeping mandates that could be unnecessarily burdensome and counterproductive, say attorneys at Curtis.
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Series
NY Banking Brief: All The Notable Legal Updates In Q4
New York's banking and financial sector saw a number of notable regulatory and legislative changes in the final quarter of 2023, including guidance on climate risks and heightened cybersecurity protocols issued by the New York State Department of Financial Services, as well as final revisions to virtual currency listings in the state, say attorneys at WilmerHale.
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4 Questions On Groundbreaking New Foreign Bribery Law
The recently enacted Foreign Extortion Prevention Act will significantly alter the anti-corruption landscape under U.S. law by allowing prosecutors to pursue foreign officials for soliciting or accepting bribes, but it’s not yet clear how the statute will be used and by whom, say attorneys at K&L Gates.
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Why CFTC Whistleblowers Are Crucial To Crypto Regulation
The U.S. Commodity Futures Trading Commission's whistleblower program has proven to be a key tool in the U.S.' efforts to police cryptocurrency, but a funding issue shows that it has become a victim of its own success, says Stephen Kohn at Kohn Kohn.
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Wachtell-X Ruling Highlights Trend On Arbitrability Question
A growing body of case law, including a California state court's recent decision in X Corp. v. Wachtell, holds that incorporation of specific arbitral body rules in an arbitration provision may in and of itself constitute clear and unmistakable evidence of delegation of arbitrability to an arbitrator, and thus such clauses should be drafted carefully, say attorneys at Norton Rose.
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7 E-Discovery Predictions For 2024 And Beyond
The legal and technical issues of e-discovery now affect virtually every lawsuit, and in the year to come, practitioners can expect practices and policies to evolve in a number of ways, from the expanded use of relevancy redactions to mandated information security provisions in protective orders, say attorneys at Littler.
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Securities Class Actions Show No Signs of Slowing In 2024
Plaintiffs asserted securities class actions at elevated levels in 2023 — a sign that filings will remain high in the year ahead — as they switched gears to target companies that allegedly have failed to anticipate supply chain disruptions, persistent inflation, rising interest rates and other macroeconomic headwinds, say attorneys at Skadden.
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How Corp. Transparency Act Can Unmask Crypto Owners
With the federal Corporate Transparency Act in effect as of Jan. 1, litigants may now have a less burdensome path toward determining the identities of owners behind convoluted corporate entities, and, by extension, any digital assets they own that could be subject to a potential judgment, says Brett Sager at Ehrenstein Sager.
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ESG Concerns Can No Longer Be Ignored In 2024
While the long wait for the U.S. Securities and Exchange Commission's ESG rule continues, government attention to regulations, increased litigation efforts and shareholder resolutions seeking transparency highlight the importance of placing an emphasis on ESG considerations, say attorneys at Wollmuth Maher.
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2 FCPA Settlements Illuminate Self-Disclosure, Disgorgement
Two of last year’s Foreign Corrupt Practices Act settlements — with biomedical company Lifecore and mining company Corsa Coal — suggest that the government will be much more flexible in negotiating disgorgement amounts if an entity voluntarily self-discloses misconduct, say Michael Gilbert and Lucas Amodio at Sheppard Mullin.
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Opinion
Conflicts Abound When Activist Short-Sellers Publish Reports
The self-serving relationship between activist short-sellers and plaintiff-side litigators is conflict-ridden and hinders the fact finder's impartiality when a short report forms the basis for lead plaintiffs' allegations, say Nessim Mezrahi and Stephen Sigrist at SAR.
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5 Litigation Funding Trends To Note In 2024
Over the next year and beyond, litigation funding will continue to evolve in ways that affect attorneys and the larger litigation landscape, from the growth of a secondary market for funded claims, to rising interest rates restricting the availability of capital, says Jeffery Lula at GLS Capital.