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Securities
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October 17, 2024
Trump Media Investors Get Prison For Insider Trading
A New York federal judge on Thursday sentenced a Florida venture capitalist to over two years in prison for insider trading on confidential plans to take the media company behind former President Donald Trump's Truth Social network public, a scheme that netted the investor and his brother nearly $23 million.
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October 17, 2024
Acadia Hid Wrongful Detainment Of Patients, Investor Claims
Behavioral healthcare provider Acadia Healthcare was hit with a proposed securities class action in Tennessee federal court alleging that investors were damaged after The New York Times published an investigative report saying the company detained patients in its psychiatric facilities for financial gain rather than out of medical necessity.
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October 17, 2024
Stockholders Sue Tech Co. Controllers Over Equity Shuffle
Stockholders of materials science venture Footprint International have sued the company, several current and former board members and its controlling shareholders in Delaware Chancery Court, seeking damages for allegedly conflicted refinancing moves that stripped regular shareholders of their interests and rights.
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October 17, 2024
CFTC Says Court 'Erred At Every Turn' In Election Betting Suit
The U.S. Commodity Futures Trading Commission told the D.C. Circuit that the district court "erred at every turn" when it allowed trading platform KalshiEx LLC to offer event contracts based on the outcome of U.S. elections.
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October 17, 2024
DOL, Red States Spar Over Loper Bright Impact On ESG Rule
Conservative-led states suing the U.S. Department of Labor have told a Texas federal court that the end of the Chevron doctrine boosts their bid to end a rule allowing retirement plan advisers to consider environmental, social and governance factors in investment choices, while the DOL argued that it deserves another summary judgment win.
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October 17, 2024
Rocket Investors Eye New Cert. Bid After Post-Goldman Denial
A pension fund has asked a Michigan federal judge for another chance at class certification in a suit alleging Rocket Cos. hid its knowledge of a drop in its mortgage business, saying the new class would be "substantially narrowed" after certification was previously denied in light of a recent U.S. Supreme Court decision.
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October 17, 2024
Feds Arrest Man In SEC X Account Hack Touting Bitcoin ETF
An Alabama man was arrested Thursday on federal charges tied to the January hack of the U.S. Securities and Exchange Commission's X account, which caused bitcoin prices to spike after a phony post falsely touted that the agency had approved bitcoin exchange-traded products, federal authorities said.
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October 17, 2024
Zoox Investors Battle Amazon Sale Suit Toss In Chancery
An attorney for self-driving robotaxi venture Zoox Inc., its directors and Amazon.com told Delaware's chancellor on Thursday that insolvency was days away when Zoox agreed to a $1.3 billion acquisition by Amazon.com in June 2020, despite conflicting claims from stockholders who challenged the deal.
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October 17, 2024
Meta Judge Doubts Investor Suit Over Efforts To Protect Kids
A California federal judge appeared skeptical Thursday of keeping alive an investor's lawsuit claiming Meta Platforms Inc.'s annual proxy statement misled investors about the social media giant's efforts to protect children from sexual predators, telling the investor his economic loss arguments are circular and doubting whether Meta's statements are actionable.
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October 17, 2024
Amgen Faces Derivative Suit In Del. Over Tax Disclosures
An Amgen Inc. stockholder has sued the company in Delaware's Court of Chancery seeking derivative recoveries for the multinational biopharmaceutical company from its directors and officers based on allegedly false and misleading statements regarding $10.7 billion in federal tax bills and penalties.
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October 17, 2024
FTC Admits Federal Court Merger Fights Are Usually Decisive
Federal Trade Commission complaint counsel has admitted a reality that the agency has long resisted: While federal court preliminary injunction fights are ostensibly meant only to pause a merger while a merits case plays out through an in-house court, the federal court case usually decides the transaction's fate.
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October 17, 2024
FTX Insider Cites 'Limited' Fraud Role In Bid To Avoid Prison
The former head of engineering at FTX asked a Manhattan federal judge to spare him prison time in light of his cooperation with prosecutors and what he said was a relatively "limited" role in the crypto exchange's billion-dollar fraud.
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October 16, 2024
TD Bank's $3B AML Deal Sparks Scrutiny Of Its Oversight
The long-standing, widespread compliance failures at the root of TD Bank's blockbuster $3 billion U.S. anti-money laundering settlement last week have stunned experts and brought tough punishment for the Canadian bank — but they're also raising questions about why regulators didn't act sooner.
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October 16, 2024
NY's Financial Regulator Releases AI Cybersecurity Guidance
New York's Department of Financial Services issued new guidance Wednesday intended to give state-regulated financial institutions an outline for protecting against cybersecurity risks posed by artificial intelligence.
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October 16, 2024
Chinese AI Co. Hit With Investor Suit Over Nasdaq Compliance
China-based artificial intelligence company Xiao-I Corp. was hit with a proposed investor class action in New York federal court alleging it downplayed increasing research and development costs that it was incurring, increasing the likelihood that it would fail to comply with the Nasdaq Stock Market's minimum price requirement after going public.
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October 16, 2024
Gatos Silver Investor Deal Gets Final OK, Attys Score $6M Fee
Attorneys from Bleichmar Fonti & Auld LLP, Wheeler Trigg O'Donnell LLP and The Schall Law Firm will receive over $6 million after representing investors in a settlement with precious metals company Gatos Silver Inc. over claims the company knowingly overstated expectations about the resources and reserves in its mine in Mexico.
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October 16, 2024
ConocoPhillips Targets Hedge Fund Over Del. Citgo Sale
ConocoPhillips has initiated a new lawsuit in Delaware in an attempt to preserve the value of Citgo's indirect parent company, PDV Holding Inc., for an upcoming auction aimed at satisfying Venezuelan debt, as Connecticut hedge fund Gramercy allegedly threatens to undermine the long-awaited Citgo sales process.
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October 16, 2024
3rd Par Funding Exec Admits To Racketeering In $100M Scam
The last member of the triumvirate behind Par Funding, a cash advance company that federal prosecutors say bilked investors out of $100 million, pleaded guilty to racketeering in Pennsylvania federal court Wednesday, just weeks before he was scheduled to stand trial.
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October 16, 2024
Atty Pressed On DMI Stock Drop Focus In Del. Merger Suit
A Delaware vice chancellor repeatedly pressed an attorney for shareholders of 3D printer manufacturer The ExOne Co. Wednesday on the relative importance of a stock drop experienced by acquirer Desktop Metal Inc. before and after shareholders voted on a $575 million merger.
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October 16, 2024
Banks Ditch Exchange's Boycott Conspiracy Suit At 2nd Circ.
The Second Circuit on Wednesday rejected a small trading exchange's effort to revive its claims that several major banks conspired to shut it out of the credit default swap market, saying the exchange failed to plausibly allege that the banks' conduct was the result of an unlawful agreement or conspiracy.
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October 16, 2024
Hawaii Utility Beats Investor Suit Over Wildfire, For Now
A California judge on Tuesday dismissed a shareholder suit filed against Hawaiian Electric Industries Inc. in the wake of a deadly fire on Maui in 2023, but will allow plaintiffs to amend their claims that the company failed to warn investors about its inadequate risk mitigation program.
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October 16, 2024
Pharma Co. Contractor Settles SEC Insider Trading Claim
An information technology consultant for a Massachusetts biopharmaceutical company will pay the U.S. Securities and Exchange Commission over $28,000 to resolve claims he immediately dumped shares of his client when he got wind of its yet-to-be announced plans for major layoffs.
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October 16, 2024
Ex-Pharma Co. Employee Traded On GSK Deal Info, SEC Says
The former director of analytical development at Canada-based drug company Bellus Health Inc. has agreed to pay the U.S. Securities and Exchange Commission over $120,000 to settle claims that he sold shares on nonpublic information about pharma giant GSK's impending takeover of his company, according to court filings.
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October 16, 2024
SEC To Settle Claims CBD Exec Took $13M From Hospital
The U.S. Securities and Exchange Commission is ready to make a deal with a former cannabidiol products executive accused of taking $13 million from a hospital after falsely promising to deliver urgently needed masks during the height of the pandemic.
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October 16, 2024
Alphatec Investor Seeks $9.5M Atty Fee After Chancery Win
A family office investment company that recently won a five-year battle over millions worth of securities purchase rights not honored by a surgical and medical device developer asked Delaware's Court of Chancery on Wednesday to shift more than $9.5 million in fees and expenses to the developer.
Expert Analysis
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Navigating New Enforcement Scrutiny Of 'AI Washing'
The U.S. Securities and Exchange Commission's recent lawsuit against Joonko Diversity, its first public AI-focused enforcement action against a private company, underscores the importance of applying the same internal legal and compliance rigor to AI-related claims as other market-facing statements, say attorneys at Fried Frank.
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How Fund Advisers Can Limit Election Year Pay-To-Play Risks
With Minnesota Gov. Tim Walz now the Democratic candidate for vice president, politically active investment advisers should take practical steps to avoid triggering strict pay-to-play rules that can lead to fund managers facing mutli-year timeouts from working with public funds after contributing to sitting officials, say attorneys at Dechert.
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Why Attorneys Should Consider Community Leadership Roles
Volunteering and nonprofit board service are complementary to, but distinct from, traditional pro bono work, and taking on these community leadership roles can produce dividends for lawyers, their firms and the nonprofit causes they support, says Katie Beacham at Kilpatrick.
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'Pig Butchering': The Scam That Exploits Crypto Confusion
Certain red flags can tip off banks to possible "pig-butchering," and with the scam's increasing popularity, financial institutions need to take action to monitor entry points into the crypto space, detect suspicious activity and provide a necessary backstop to protect customers, say Brandon Essig and Mary Parrish McCracken at Lightfoot Franklin.
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Opinion
Agencies Should Reward Corporate Cyber Victim Cooperation
The increased regulatory scrutiny on corporate victims of cyberattacks — exemplified by the U.S. Securities and Exchange Commission's case against SolarWinds — should be replaced with a new model that provides adequate incentives for companies to come forward proactively and collaborate with law enforcement, say attorneys at McDermott.
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9 Liability Management Tips As Debt Maturity Cliff Looms
As the debt maturity cliff swiftly approaches in this challenging environment, attorneys at Winston & Strawn highlight the top considerations for boards of directors and finance professionals to think about when structuring and executing liability management transactions, including reviewing capital structure, evaluating debt covenants, and more.
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How Transaction Lookbacks Can Guide Fintech Companies
As transaction lookbacks continue to be a key focus of enforcement actions, newer financial institutions like fintech companies should know they can benefit from proactively investigating their potential failure to identify suspicious activity, creating a compliance road map and building trust with regulators in the process, say attorneys at Jenner & Block.
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Firms Must Offer A Trifecta Of Services In Post-Chevron World
After the U.S. Supreme Court’s Loper Bright Enterprises v. Raimondo decision overturning Chevron deference, law firms will need to integrate litigation, lobbying and communications functions to keep up with the ramifications of the ruling and provide adequate counsel quickly, says Neil Hare at Dentons.
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5 Ways Life Sciences Cos. Can Manage Insider Trading Risk
In light of two high-profile insider trading jury decisions against life sciences executives this year, public companies in the sector should revise their policies to account for regulators' new and more expansive theories of liability, says Amy Walsh at Orrick.
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Series
A Day In The In-House Life: Narmi GC Talks Peak Productivity
On a work-from-home day in August, Narmi general counsel Amy Pardee chronicles a typical day in her life in which she organizes her time to tackle everything from advising on products and contract negotiations to volunteering and catching up on the New York Times crossword.
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How Ripple Final Judgment Fits In Broader Crypto Landscape
The Southern District of New York's recent $125 million civil penalty levied in U.S. Securities and Exchange Commission v. Ripple will have a broad impact on the crypto industry as it was the first to hold that blind sales of digital assets are not securities, even if deemed securities in other circumstances, say attorneys at BakerHostetler.
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5 Tips To Succeed In A Master Of Laws Program And Beyond
As lawyers and recent law school graduates begin their Master of Laws coursework across the country, they should keep a few pointers in mind to get the most out of their programs and kick-start successful careers in their practice areas, says Kelley Miller at Reed Smith.
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Series
After Chevron: SEC Climate And ESG Rules Likely Doomed
Under the U.S. Supreme Court's recent decision in Loper Bright, without agency deference, the U.S. Securities and Exchange Commission's climate disclosure and environmental, social and governance rules would likely be found lacking in statutory support and vacated by the courts, says Justin Chretien at Carlton Fields.
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Assessing Whether Jarkesy May Limit FINRA Prosecutions
The U.S. Supreme Court’s recent decision in Jarkesy v. U.S. Securities and Exchange Commission, holding that civil securities fraud defendants are entitled to jury trials, may cause unpredictable results when applied to Financial Industry Regulatory Authority prosecutions, say Barry Temkin and Kate DiGeronimo at Mound Cotton.
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Series
Being An Opera Singer Made Me A Better Lawyer
My journey from the stage to the courtroom has shown that the skills I honed as an opera singer – punctuality, memorization, creativity and more – have all played a vital role in my success as an attorney, says Gerard D'Emilio at GableGotwals.