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Fintech
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April 17, 2024
Judge Merges Axos Bank Suits But Won't Appoint Counsel Yet
A California federal judge has agreed to consolidate a pair of cases over how Axos handled interest rates on savings deposit accounts offered through an online banking division, but rejected its customers' bid to name three law firms as interim co-lead counsel, saying it is not necessary at this time since more consolidation could occur.
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April 17, 2024
IBM Privacy Head Says AI Needs Transparency To Be Trusted
To combat artificial intelligence-generated deepfakes, disinformation and bias requires transparent, open-sourced AI models and swift regulations that protect elections, creators and the public, says IBM's Chief Privacy & Trust Officer Christina Montgomery.
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April 16, 2024
Crypto Co. Can't Be Sued Over 'Scam Token,' 2nd Circ. Hears
The business, founder and venture capital backers behind decentralized cryptocurrency exchange Uniswap Labs told the Second Circuit that a New York federal judge was right to dismiss a suit from investors who claimed they bought scam tokens on the platform since the business didn't enter into any contract with buyers.
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April 16, 2024
9th Circ. Upholds Tossing Skillz Gaming Tech Investor Suit
The Ninth Circuit on Tuesday upheld a decision to toss a proposed class action claiming that mobile gaming company Skillz Inc. misled investors about its technology prior to a 2021 merger with a special purpose acquisition company, ruling that issues with the gaming software do not make the company' statements false or misleading.
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April 16, 2024
SEC Hit With Class Action Over Database Privacy Concerns
A conservative think tank filed a lawsuit in Texas federal court Tuesday hoping to put an end to a U.S. Securities and Exchange Commission market surveillance tool known as the consolidated audit trail, arguing in the proposed class action that the database threatens to subject the personal information of tens of millions of American citizens to a possible data breach.
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April 16, 2024
Genesis To Return $2B Of Crypto Under Gemini Settlement
Bankrupt crypto lender Genesis will return 97% of digital assets from a customer program with crypto platform Gemini by early May after a New York bankruptcy judge on Tuesday approved a settlement that attorneys for Genesis said closes out bitter disputes and sets it up to repay other creditors under a Chapter 11 plan.
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April 16, 2024
CFPB Moves To 'Streamline' How It Tags Nonbanks For Exams
The Consumer Financial Protection Bureau on Tuesday unveiled procedural adjustments to its process for singling out fintech firms and other nonbanks for examination, changes the agency attributed in part to plans for an internal reorganization of its supervision and enforcement unit.
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April 16, 2024
Terraform Creditors Say All Clear To Hire Crypto Tracing Firm
The creditors committee for bankrupt cryptocurrency startup Terraform Labs Pte. Ltd. said on Tuesday it had resolved the only issues the U.S. Trustee's Office had with the committee's request to hire an investment bank to advise it on tracing cryptocurrency in Terraform's Chapter 11 case.
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April 16, 2024
Binance.US Adds Ex-NY Fed Compliance Chief To Board
Binance.US announced Tuesday that it had brought aboard a seasoned compliance and regulation expert to join its board of directors, three months after the cryptocurrency platform hired a new top compliance officer amid federal regulators' ongoing scrutiny of the platform.
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April 16, 2024
Chancery Tosses Zelle Fraud Suit Against JPMorgan Directors
A JPMorgan Chase & Co. shareholder that sued the bank's board for allegedly ignoring fraud on the payment platform Zelle has not shown the bank failed to respond to the problem, a Delaware Chancery Court judge ruled Tuesday, dismissing the shareholder's case.
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April 15, 2024
Dems Grill Chamber Over 'Outrageous' CFPB Card Fee Suit
Two top Democratic senators are calling on the U.S. Chamber of Commerce to explain why it sued to block the Consumer Financial Protection Bureau's $8 credit card late fee rule, a case they say is "outrageous" and puts the interests of big banks over the group's rank and file.
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April 15, 2024
FTX Liquidators Describe Operating Blindly In Initial Days
The U.S. liquidator for collapsed cryptocurrency exchange FTX told attendees at the OffshoreAlert Conference in Miami Beach, Florida, the case was unlike any other he'd handled as the company had "no set of books," forcing both onshore and offshore liquidators to scramble to track down assets.
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April 15, 2024
'Pig Butchering' Scams' Human Toll Has Experts Alarmed
Financial institutions, cryptocurrency exchanges and social media companies need to do more to stem a growing tide of so-called pig butchering scams, which experts at the OffshoreAlert Conference in Miami said Monday are wreaking havoc on victims while funding a large human trafficking operation.
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April 15, 2024
Coinbase Wants 2nd Circ. To Weigh Crypto's Howey Question
Crypto exchange Coinbase has asked a Manhattan federal judge to send the question of whether digital assets meet the definition of investment contracts to the Second Circuit, challenging a March order that found the U.S. Securities and Exchange Commission had adequately pled that the platform offered securities.
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April 15, 2024
CFPB Hits Back At Bank Challenge To Small-Biz Lending Rule
The Consumer Financial Protection Bureau has urged a Texas federal judge to dispense with an industry-backed challenge to its now-stayed reporting requirements for lenders in the nearly $2 trillion small-business loan market, arguing much of the case boils down to a beef with Congress for mandating the requirements in the first place.
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April 15, 2024
Worldpay Sues Shuttered Retailer Over Refund Refusals
Payment processor Worldpay LLC is requesting injunctive relief in Ohio federal court to alleviate the millions of dollars in losses it says it has incurred since home appliance retailer Pirch Inc. began refusing to honor its customers' credit card refund requests after halting operations abruptly in March.
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April 15, 2024
Feds Say $3.5M 'Cryptojacking' Scam Targeted Cloud Services
A Nebraska man defrauded two cloud computing services of $3.5 million and used the proceeds to mine an additional $1 million in cryptocurrency, Brooklyn federal prosecutors said Monday.
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April 15, 2024
Senators Demand Info On CFTC Chats With Bankman-Fried
Two U.S. senators have asked the U.S. Commodity Futures Trading Commission's chair to detail all of his communications and meetings with convicted FTX fraudster Sam Bankman-Fried.
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April 15, 2024
Justices Allow Class Action Over ATM Fees To Proceed
The U.S. Supreme Court on Monday declined to review a D.C. Circuit decision affirming class certifications in a long-running ATM fee dispute, which Visa and Mastercard claimed created a circuit split over the correct standard of review courts should use when considering certification motions.
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April 12, 2024
Jane Street Says Millennium, Ex-Workers Stole Trade Secrets
Trading firm Jane Street Group LLC sued rival Millennium Management LLC and two former employees in New York federal court Friday, alleging they stole a confidential trading strategy and have reaped "massive profits from this theft."
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April 12, 2024
Feds Rest In $110M Mango Markets Trial Of Crypto Trader
Manhattan federal prosecutors on Friday rested their case against a crypto trader accused of stealing $110 million from Mango Markets investors by pumping the price of the exchange's native token, while the defense argued that the government had failed to show that the crypto derivatives at issue were swaps as alleged in the indictment.
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April 12, 2024
Crypto-Friendly Atty Reveals Backers In Bid To Unseat Warren
The cryptocurrency-boosting attorney running in Massachusetts to unseat crypto critic Sen. Elizabeth Warren has garnered the support of notable digital asset industry leaders, according to his quarterly report to the Federal Election Commission.
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April 12, 2024
'Much More Is Coming': Experts See Wave Of AI-Related Suits
Legal experts speaking Friday at the University of California, Berkeley School of Law's symposium on artificial intelligence and evidence in civil litigation warned that broadening usage and increased regulation will lead to a wave of litigation over the technology, leaving courts to analyze the "black box" of corporate AI algorithms to determine liability.
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April 12, 2024
Republicans Warn CFPB Against Pursuing Arbitration Rule 2.0
Two Republican lawmakers are cautioning the Consumer Financial Protection Bureau against heeding calls for another rulemaking to restrict arbitration provisions in consumer financial contracts, warning that such an effort would be a "significant abuse" of the agency's authority.
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April 12, 2024
Capital Recruiter Awarded $7.8M In Back Fees In Breach Suit
An Atlanta-area capital recruiting firm is owed more than $7.8 million in lost commissions from a former financial technology client that violated its agreement to pay the recruiter to connect it with investors, according to a verdict from a Georgia federal jury.
Expert Analysis
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Del. Ruling Stands Out In Thorny Noncompete Landscape
In Cantor Fitzgerald v. Ainslie, the Delaware Supreme Court last month upheld the enforceability of forfeiture-for-competition provisions in limited partnership agreements, providing a noteworthy opinion amid a time of increasing disfavor toward noncompetes and following a string of Chancery Court rulings deeming them unreasonable, say Margaret Butler and Steven Goldberg at BakerHostetler.
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SEC Regs Give Banks Chance To Step Up Cyber Safety Game
Just as the Sarbanes-Oxley Act forced financial institutions to undertake best practices in recordkeeping, the U.S. Securities and Exchange Commission’s recently effective cybersecurity regulations stand to similarly drive those same enterprises to seek out and implement best practices in cybersecurity, to everyone's benefit, says James Gerber at SimSpace.
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A Post-Mortem Analysis Of Stroock's Demise
After the dissolution of 147-year-old firm Stroock late last year shook up the legal world, a post-mortem analysis of the data reveals a long list of warning signs preceding the firm’s collapse — and provides some insight into how other firms might avoid the same disastrous fate, says Craig Savitzky at Leopard Solutions.
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Predicting DeFi Regulations At Home And Abroad In 2024
Though decentralized finance has advocates on both sides of the Atlantic in figures like U.S. SEC Commissioner Hester Peirce and U.K. Prime Minister Rishi Sunak, DeFi in 2024 seems likely to be folded into existing regulatory frameworks in the U.K. and EU, while anti-crypto scrutiny may discourage DeFi’s growth in the U.S., say Daniel Csefalvay and Eric Martin at BCLP.
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Understanding SEC's Focus Amid Lack Of Final AI Rules
Although the U.S. Securities and Exchange Commission's proposed rules to govern artificial intelligence are likely far from being finalized, understanding existing regulatory provisions that could address AI risks with respect to development, disclosure, compliance and data protection could help firms anticipate and avoid pitfalls, say attorneys at Skadden.
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How High Court SEC Case Could Affect The ITC
While the U.S. Supreme Court’s upcoming ruling in U.S. Securities and Exchange Commission v. Jarkesy will likely spare the U.S. International Trade Commission from major operative changes, the ITC’s ability to issue penalties for violations of its orders may change, say Gwendolyn Tawresey and Ryan Deck at Troutman Pepper.
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CFPB Overdraft Rule Could Mean Big Shift In Banking Biz
The Consumer Financial Protection Bureau has proposed "to close a longstanding loophole" in the Truth in Lending Act by changing how it regulates overdraft fees, but underneath the headline-grabbing proposal is a foundational shift in how the bureau views overdraft services, say attorneys at Katten.
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Open Questions After Elastos Crypto Class Action Settlement
The recent settlement in Owen v. Elastos Foundation resolving a class action fight over whether Elastos was required to register an initial coin offering with U.S. regulators has raised several questions that may be of interest to lawyers litigating cryptocurrency-related cases, including whether a crypto token constitutes a security under U.S. law, says Bradley Simon at Schlam Stone.
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Series
Coaching High School Wrestling Makes Me A Better Lawyer
Coaching my son’s high school wrestling team has been great fun, but it’s also demonstrated how a legal career can benefit from certain experiences, such as embracing the unknown, studying the rules and engaging with new people, says Richard Davis at Maynard Nexsen.
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Implications For Digital Assets After SEC Settlement With DAO
The U.S. Securities and Exchange Commission's December settlement with BarnBridge — finding that the decentralized autonomous organization's products were securities under federal law — foreshadows increased enforcement attention on digital assets, and reveals arguments the SEC may use in similar disputes with decentralized finance protocols, say attorneys at K&L Gates.
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SG's Office Is Case Study To Help Close Legal Gender Gap
As women continue to be underrepresented in the upper echelons of the legal profession, law firms could learn from the example set by the Office of the Solicitor General, where culture and workplace policies have helped foster greater gender equality, say attorneys at Ocean Tomo.
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Bitcoin ETF Approval Doesn't Mean SEC Approves Of Crypto
While the U.S. Securities and Exchange Commission's approval last month of 11 applications for spot exchange-traded funds tracking bitcoin is a landmark moment for the crypto-asset industry, investors who are hopeful that the SEC will approve similar crypto-based ETFs may be disappointed, says attorneys at Mintz.
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How Proposed Bipartisan Bill Would Reform Bank Exams
If the Fair Audits and Inspections for Regulators’ Exams Act, which was recently introduced by a bipartisan group of senators, were to be enacted, it would particularly benefit small lenders and bank-fintech partnerships by promoting transparency, appellate rights and examiner accountability, say attorneys at Latham.
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Crypto Issues To Watch Amid Evolving Legal Landscape
This year will likely be a momentous one for crypto in the U.S., but whether it is successful or disastrous will depend on the outcome of high-profile court decisions and key regulatory actions, say attorneys at Venable.
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FTC AI Inquiry Signals Intensified Focus On Emerging Tech
The Federal Trade Commission's recent inquiry into investments and partnerships between Big Tech companies and artificial intelligence startups appears to be directed at guiding future enforcement decisions in competition, privacy and consumer protection — and three principles discussed at a related tech summit give insight on the agency's approach, say attorneys at Skadden.