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Securities
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May 01, 2024
PayPal Won't Face CFPB Enforcement Over Venmo Probe
Payments giant PayPal is not expecting any enforcement action from the Consumer Financial Protection Bureau after the agency told the firm it was closing its inquiry into social payment subsidiary Venmo, the company disclosed in a securities filing.
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May 01, 2024
5 Benefits Appellate Arguments To Watch In May
The Second Circuit will be asked to revive a 401(k) mismanagement suit against Deloitte, the Sixth Circuit will consider whether to force arbitration of a 401(k) fee suit against two automotive companies, and the Seventh Circuit will review the U.S. Department of Labor's court-ordered takeover of a multiemployer benefit fund. Here, Law360 looks at five appellate arguments benefits attorneys will want to keep an eye on this month.
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May 01, 2024
Ex-Execs End Fight Over Syska Hennessy Stock Buyback Deal
A former associate vice president and a managing director at engineering firm Syska Hennessy have ended their lawsuit alleging that the company made up a story about the pair soliciting employees to get out of buying back company stock.
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May 01, 2024
No Relief For Fla. Adviser Convicted In $80M Trading Scam
The Eleventh Circuit on Wednesday affirmed the conviction of a Florida investment adviser who bilked more than $80 million from the hundreds of people he persuaded to invest in a fraudulent company, after concluding he was not in custody when he made statements to the police.
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May 01, 2024
Ex-Cybersecurity Firm CEO Settles SEC Fraud Claims
A former executive for a cybersecurity firm has agreed to settle regulators' allegations that he lied to investors about the firm's success in selling a new product and that he fabricated aspects of his background and experience, according to filings in Texas federal court.
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May 01, 2024
Split 2nd Circ. Backs Arbitration Denial In ERISA Suit
A divided Second Circuit panel ruled Wednesday that a group of financial services companies can't compel individual arbitration of a proposed class action accusing them of overcharging an employee stock ownership plan, saying that doing so would prevent a plan participant from seeking planwide remedies authorized by federal benefits law.
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May 01, 2024
NY Man Charged With $43M Hospitality Ponzi Scheme
A Manhattan resident was charged Wednesday with soliciting $43 million in investments through a Ponzi scheme that peddled false claims about his company's business interests in cryptocurrency, Las Vegas sports stadiums and hospitality.
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May 01, 2024
'Foul' BioVentrix Cash-Out Gets Extra Scrutiny, Chancery Says
A medical device company's decision to suddenly and without explanation cash out its common stockholders for less than a penny just two months before the company raised $48.5 million in new capital creates such a "foul flavor" that it deserves extra scrutiny, a Delaware Chancery Court judge said Wednesday.
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May 01, 2024
Del. Justices Reverse Toss Of $7.3B Inovalon Deal Challenge
Delaware's top court on Wednesday reversed a Chancery Court dismissal of stockholder challenges to the $7.3 billion go-private sale of Inovalon Holdings Inc. to Nordic Capital, saying that the lower court wrongly concluded that minority investors were adequately informed about the deal and special committee conflicts of interest.
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May 01, 2024
Paramount Faces Chancery Suit Over Skydance Merger Moves
The general treasurer of Rhode Island has sued Paramount Global in Delaware's Chancery Court for access to records regarding efforts to merge the mass media giant with Skydance Media, accusing Paramount's billionaire controller, Shari Redstone, of usurping company opportunities and tilting the terms and processes toward her own benefit.
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May 01, 2024
Globe Life Hid Toxic Culture And Policy Fraud, Investors Say
Life insurance company Globe Life Inc. has been hit with a proposed class action alleging investors were damaged when a short-seller report revealed that the company had been ignoring rampant sexual harassment among its employees and participating in fraudulent underwriting practices.
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May 01, 2024
Conn. Attorney Scores Default $85K Win In Legal Bill Feud
A federal judge has ordered two Colorado companies, one of which claimed to be working on a cryptocurrency exchange, to pay a default judgment of $85,456 after failing to answer a Connecticut firm's claims that they failed to pay nearly $107,000 in legal fees.
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May 01, 2024
Insulin Pump Maker Wins Toss of Investor Suit For Now
A California federal judge has sided with an insulin pump maker and tossed a suit alleging it misled investors about the potential growth of the company amid inflation and an uptick in competition, saying the suing investors have failed to plead any false or misleading statements or knowledge of wrongdoing by the defendants.
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May 01, 2024
Trump's Truth Social Stake Expands To Nearly 65%
Former President Donald Trump's stake in his social media platform rose to 65%, according to a securities filing, valuing his stake at more than $5 billion based on current trading, though Trump is barred from selling shares for several months.
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May 01, 2024
AI Is Top Of Mind For Companies — And Securities Regulators
As references to artificial intelligence in securities filings soar, attorneys say companies must ground their disclosures in fact and be upfront about risks posed by AI in order to avoid the wrath of regulators, who promise to crack down on misleading claims.
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April 30, 2024
SEC Vet Joins NC Firm 'Reinventing' White Collar
The former assistant secretary of the U.S. Securities and Exchange Commission, Christina Zaroulis Milnor, has left government service after more than a decade to launch a Washington, D.C., office for North Carolina-based Cranfill Sumner LLP alongside two firm partners who say they are reinventing traditional white collar work, the firm announced Wednesday.
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April 30, 2024
2nd Circ. Revives Commerzbank RMBS Suit Against US Bank
The Second Circuit on Tuesday revived part of a nearly decade-old Commerzbank AG lawsuit brought against U.S. Bank NA over its role as a trustee on a slew of pre-2008 crisis RMBS trusts, sending some of the German bank's previously dismissed claims back to district court for a "closer inspection."
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April 30, 2024
Ex-Autonomy VP Says CEO Lynch Told Him To Lie To Investors
A former Autonomy business development executive testified Tuesday that CEO Mike Lynch directed him to lie to a hedge fund investor about prepaid royalty deals that boosted the company's upfront revenue numbers, saying at Lynch's criminal fraud trial that it was hard to say no to the "big boss."
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April 30, 2024
SEC Says Penny Stock Firm Failed To Register As A Dealer
The U.S. Securities and Exchange Commission has sued a New Jersey company for allegedly dealing in penny stock without registering as a securities dealer, echoing claims the agency made against a different lender, which the Eleventh Circuit largely affirmed in February.
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April 30, 2024
'Bitcoin Jesus' Dodged Nearly $50M In Taxes, Feds Say
The U.S. has charged an early bitcoin investor dubbed "Bitcoin Jesus" over allegations that he dodged approximately $48 million in taxes by filing false tax returns and concealing how much of the cryptocurrency he owned, according to an announcement from the U.S. Department of Justice on Tuesday.
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April 30, 2024
Chancery Tosses Meta Activist Investor Suit Over Social Ills
A Delaware vice chancellor tossed a Meta activist investor's suit seeking to prioritize wider social impact over company profits, saying Delaware's single-firm corporate model assumes directors owe fiduciary duties to their company's stockholders, and there's no case law articulating that because it's "so basic," just as "fish don't talk about water."
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April 30, 2024
SEC Fines Adviser Firm For Splitting Legal Fees With Client
A Puerto Rico-based investment adviser will pay more than $500,000 to settle the U.S. Securities and Exchange Commission's claims it entered into an improper joint legal fee arrangement with a mutual fund that was also its client.
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April 30, 2024
SEC Fines 3 Men For Insider Trading On Zogenix Buyout
The U.S. Securities and Exchange Commission reached deals Tuesday totaling more than $170,000 with three men accused of trading shares of biopharmaceutical company Zogenix Inc. based on insider information.
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April 30, 2024
5th Circ. Questions Texas' Standing In SEC Proxy Rule Battle
The Fifth Circuit appeared skeptical Tuesday of a Texas-led challenge to a U.S. Securities and Exchange Commission regulation that will require fund managers to make it easier for investors to identify ESG issues on corporate ballots, with the judges wondering whether the Lone Star State and others had standing to bring the lawsuit.
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April 30, 2024
Debt Box Wants Attorney Fees Paid If SEC Brings New Action
Crypto project Debt Box has asked a Utah federal judge to impose multiple "guardrails" if the court allows the U.S. Securities and Exchange Commission to refile its troubled registration suit against the firm, including payment of all attorney fees arising from the original, compromised suit.
Expert Analysis
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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.
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Bank-Fintech Partnerships Can Thrive Despite A Tough 2023
Many banking-as-a-service players experienced regulatory enforcement activities in 2023, including consent orders and more targeted, detailed guidance aimed at bank-fintech partnerships, and while it seems this trend will continue in 2024, savvy banks can use the turmoil of last year as a guide for how to better manage the risks inherent in partnerships, says Justin Steffen at Barack Ferrazzano.
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5 Securities Litigation Issues To Watch In 2024
There is yet another exciting year ahead for securities litigation, starting with the U.S. Supreme Court hearing argument next week in a case presenting a key securities class action question that has eluded review for the last eight years, say attorneys at Willkie.
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Antitrust And ESG: Maximizing Targets, Ensuring Compliance
Jennifer McAlpin at Verizon and Michaela Spero at Amadeus consider the convergence of antitrust and environmental, social and corporate governance factors, providing an executive overview of areas to watch, including mergers and acquisitions, as well as practical implementation tips for general counsel.
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Series
ESG Around The World: South Africa
While South Africa has yet to mandate the reporting of nonfinancial and environmental, social, and corporate governance issues, policy documents and recent legislative developments are likely to have a material impact in the country's transition to a low-carbon economy and in meeting its international obligations, say Glynn Kent at Eversheds Sutherland.