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- The Corporate Disclosure Side of the Massive Crowdstrike IT Failure
The Corporate Disclosure Side of the Massive Crowdstrike IT Failure
Plus SEC charges two sales agents with $112 million Ponzi scheme targeting Haitian-Americans.
Good morning! Here’s what’s up.

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Tracy S. Combs, former Director of the SEC’s Salt Lake Regional Office, has joined Greenberg Traurig as a partner in its San Francisco office.

Clips ✂️
IT Meltdown Triggers Corporate Reporting Requirements: Explained
The IT failure also puts pressure on the two companies at the center of the chaos—Microsoft Corp. and cybersecurity company CrowdStrike Inc.—to disclose details to investors and Wall Street regulators.
Both companies will be expected to share via securities filings with the market both the immediate news of the mass outage and the subsequent estimated impact on their business operations and customers.
“I’ve got to believe there are rooms full of senior managers and lawyers trying to figure out how to communicate this,” said George Wilson, director of the Practising Law Institute’s program focused on securities regulation.
Yesterday, the Securities and Exchange Commission charged Broward County, Florida residents Ricardi Celicourt and Brisly Guillaume with violations of the securities registration and broker-dealer registration provisions of the federal securities laws in connection with their participation in an unregistered securities offering by Royal Bengal Logistics Inc., which fraudulently raised approximately $112 million from 1,500 investors and targeted Haitian-Americans.
The SEC’s complaint alleges that, from 2021 through 2023, defendants raised at least $109 million through Royal Bengal’s unregistered offering and received combined compensation of $1.3 million in purported bonuses tied to their efforts. As alleged, during this time period, the defendants were not registered with the Commission as brokers or dealers and Royal Bengal’s securities were not registered with the Commission, and there was no valid exemption from registration.
👉 The SEC Complaint is here.
Bloomberg has this article about the case but I stopped reading it after two words, see if you can guess why.

New York Financial Regulator Hires New Crypto Unit Leaders
New York’s financial regulator has appointed a former official from Dubai’s financial regulator to help oversee its virtual currency unit that regulates cryptocurrency businesses in the state.
Kenneth Coghill, who most recently was the director and head of innovation and technology risk supervision at Dubai Financial Services Authority, started Thursday at the New York State Department of Financial Services as its deputy superintendent of virtual currency.
Hong Kong Court Hands Out Longest Jail Time for Market Manipulation
A Hong Kong court sentenced two defendants to six years and eight months of prison time for market manipulation, the longest ever punishment for such an offense in the financial hub, according to the presiding judge.
The Hong Kong High Court announced the sentencing on Monday after convicting three defendants in May over false trading in the listed firm Ching Lee Holdings Ltd. The activities lasted more than five months in 2016 and resulted in illicit profits of over HK$124 million ($15.9 million), according to the Securities and Futures Commission. One of the defendants received a four year and four month sentence.
The case also marked the first ever jury win for the SFC involving a market manipulation case.
The Securities and Exchange Commission’s Division of Enforcement this month launched the Interagency Securities Council (ISC), which invites federal, state, and local regulatory and law enforcement professionals to meet quarterly to discuss the latest in scams, trends, frauds, and mitigation strategies.
The ISC’s objective is to strengthen the cohesion between federal, state, and local agencies, enhance opportunities to collaborate on cases to protect investors, provide insight and guidance across the ecosystem to those who may not frequently operate in this space, and create a forum for unified efforts in combatting financial fraud.
The ISC launched with representatives from more than 100 departments and agencies, including federal agencies, state offices of attorneys general and state police, and local police departments and sheriff’s offices.
BF Borgers Collapse Reveals Uncomfortable Truth About Accounting
When will we—the CPA firms, along with standard-setters, regulators, membership organizations, and buyers of audit services—confront the sobering truths our profession’s own numbers tell?
BF Borgers’ downfall inadvertently brings to light hidden figures that expose the darker truths of public accounting. It also underscores an overemphasis on price as the primary competitive edge among audit firms.
A Second Look at Third-Party Token Allegations in the SEC’s Case Against Binance
Last week, a federal judge said she would review her ruling in the U.S. Securities and Exchange Commission’s (SEC) case against Binance and affiliated entities (namely Binance.US and founder Changpeng Zhao) after attorneys for the world’s largest crypto exchange said they interpreted the ruling in a specific way beneficial to them.
During a hearing on July 9, attorneys for Binance said they interpreted Judge Amy Berman Jackson’s June 28 ruling on Binance’s motion to dismiss the SEC’s case as moving third-party tokens – digital assets alleged to be unregistered securities by the SEC that were issued by various companies not named Binance – out of the case. The judge said that was not her intention, which kicked off a nearly hour-long back-and-forth over whether she had sufficiently addressed both Binance and the SEC’s written arguments over these specific tokens.

Debevoise, Cleary Expand San Francisco Space, Seeing Opportunity in City Resurgence
— The American Lawyer (@AmericanLawyer)
4:54 PM • Jul 19, 2024
Opinion: Katten attorneys analyze the Loper Bright decision's potential impact on ESG, saying businesses must follow rules and stakeholder expectations. blawgo.com/EgXPt2N
— Bloomberg Law (@BLaw)
3:01 PM • Jul 19, 2024
A federal judge dismissed most of a SEC lawsuit against SolarWinds over a Russia-linked cyberattack. The SEC alleged that SolarWinds hid the porous cybersecurity of its products before the attack, and downplayed the attack's severity after it occurred reut.rs/3W20SpW
— Reuters Legal (@ReutersLegal)
1:00 AM • Jul 21, 2024