Coinbase Becomes Latest Company to Leave Delaware, Will Reincorporate in Texas

Longest Running Government Shutdown Ends: Where Do We Go From Here?

Overnight, the House passed a measure restoring federal government funding, and the President signed that legislation soon thereafter, making 43 days the new high water mark for federal government shutdowns. As of early this morning, the SEC’s website was updated to remove a notice indicating that the agency was shut down due to a lapse in appropriations, but no guidance has been provided as of yet regarding the agency’s reopening. As of my writing of this blog, it is unclear whether the furloughed SEC Staff will be returning to work today or tomorrow. […]

For the SEC, the shutdown could not have come at a worse time. The SEC Staff, already demoralized as a result of DOGE cuts, early retirements and a return-to-office directive, was forced to sit on the sidelines with no paychecks for nearly a month and a half. As a result of the shutdown, critical rulemaking initiatives that have been outlined by Chairman Atkins ground to a halt and momentum was lost. Now that the government has reopened, the Staff will have to dedicate scarce resources to working through a backlog of filings and requests. I know that the Staff is up for the challenge, but it is unfortunate that they have to face this challenge at all.

Why Coinbase Is Leaving Delaware for Texas

Coinbase, the largest U.S.-based cryptocurrency platform, has filed with the Securities and Exchange Commission Wednesday that it is leaving Delaware. We are reincorporating in Texas, which has become an increasingly attractive hub for innovative companies like ours. It’s a shame that it has come to this, but Delaware has left us with little choice.

As a lawyer who’s practiced for many years on King Street in Wilmington, I’m saddened by the need to depart. For decades, Delaware was known for predictable court outcomes, respect for the judgment of corporate boards, and speedy resolutions. These traits made the state the one-stop shop for major company incorporations—which have brought in more than $1 billion in annual revenue to the state.

Delaware’s legal framework once provided companies with consistency. But no more. Delaware’s Chancery Court in recent years has been rife with unpredictable outcomes. To their credit, lawmakers in Dover have repeatedly tried to rectify the inconsistent outcomes of the once-revered court through ad hoc legislative responses. But companies need a more efficient and sustainable solution than relying on the legislature to fix judicial surprises after the fact.

U.S. Mint Presses Final Penny After More Than 200 Years

The American penny died on Wednesday in Philadelphia. It was 232.

The cause was irrelevance and expensiveness, the Treasury Department said.

Nothing could be bought any more with a penny, not even penny candy. Moreover, the cost to mint the penny had risen to more than 3 cents, a financial absurdity that doomed the coin.

The final pennies were minted on Wednesday afternoon in Philadelphia. Top Treasury officials were on hand for its final journey. No last words were recorded.

Ex-Broker Admits to Insider Trading Scheme Born From Pandemic

A former Spartan Capital Securities broker admitted to insider trading based upon sensitive merger information stolen by a friend from his girlfriend’s computer while the pair were working at home during the pandemic.

The ex-broker, Jordan Meadow, pleaded guilty on Wednesday to charges including securities fraud and conspiracy before US District Judge Andrew L. Carter Jr. in New York as part of a plea deal with prosecutors. Meadow was one of more than a half-dozen people charged in June 2023 by federal prosecutors in Manhattan as part of a crackdown on insider trading.

The case was also one of several involving confidential information misappropriated from romantic partners working in close quarters during the pandemic.

Companies Are Warning Investors About AI Risks in SEC Filings

An increasing share of companies’ annual filings with the Securities and Exchange Commission now caution investors that the technology could have a significant negative impact on their businesses.

So far this year, 418 publicly traded companies valued at more than $1 billion have cited AI-related risk factors associated with reputational harm in those reports, according to an analysis conducted with AlphaSense. That is a 46% jump from 2024 and roughly nine times greater than in 2023.

AI datasets could hurt a company’s image, the filings say, by producing biased or incorrect information, compromising security, or infringing on others’ rights.

Madoff Victims Too Far Removed to Claim Theft Loss Deduction

A couple who suffered financially because of New York finance manager Bernie Madoff’s massive Ponzi scheme weren’t close enough to the scheme to claim part of their $17.5 million in losses on their tax returns, the Second Circuit said.

The US Court of Appeals for the Second Circuit affirmed a Tax Court ruling against Christopher and Silvana Pascucci, who invested in a fund that in turn invested in Madoff’s scheme. The court said Wednesday that the couple did not possess a sufficient property interest to claim the deduction, being several degrees removed from the disgraced fund manager’s actions.