What Crypto Winter?

Author

Bruce Carton
May 25, 2022

Good morning! Today we continue our series of videos from Securities Enforcement Forum West 2022.

First up, the "Directors' Panel" that has been a highlight of this event for years. This panel featured Jina Choi, Morrison & Foerster; Jordan Eth, Morrison & Foerster; Michele Wein Layne, SEC; Randall Lee, Cooley LLP; and Monique Winkler, SEC.

Jina Choi (former Regional Director of the SEC's SF office) noted that while you have to learn from your mistakes, it’s much less painful and less traumatic to learn from others' mistakes. 😀

This year's event also featured, for the first time, an extraordinary panel called "On the Inside: Views from SEC Lawyers Who’ve Gone In House." All five members of the panel (David Berman, Lyft; Jessica Chan, Uber Technologies; Samantha Choe, Uber Technologies; Jason Habermeyer, Charles Schwab; and Dr. Hemma Ramrattan Lomax, Snap) are in-house counsel from the Bay Area who now handle enforcement and investigations at their companies. In addition, all of them have prior experience in the SEC’s Enforcement Division.

Clips ✂️

Insurance Providers Rethink Their Approach to Crypto

Many crypto exchanges and custodians have for years been unable to get insurance or shied away from getting it because of high premiums stemming from a dearth of insurers willing to underwrite the industry’s risk. Some big exchanges have chosen to insure themselves instead.

But that is slowly changing, as the traditionally risk-averse insurance industry—from big brokers to new startups—dips its toes into the water by setting up new teams focusing on cryptocurrency, hoping to profit from the industry’s rapid growth.

by WSJ

SEC Charges TradeZero America and Co-Founder with Deceiving Customers about Meme Stock Trading Halts

The Securities and Exchange Commission today charged broker-dealer TradeZero America Inc., and its co-founder, Daniel Pipitone, with falsely stating to the firm’s customers that they didn’t restrict the customers’ purchases of meme stocks when in fact they did.

In late January 2021, many brokers restricted investors’ ability to purchase a group of highly volatile stocks generally known as “meme stocks.” According to the SEC’s order, on January 28, 2021, TradeZero was instructed by its clearing broker not to allow its customers to purchase three meme stocks. TradeZero ultimately halted purchases for about 10 minutes. After the halt, TradeZero and Pipitone made misleading public statements via interviews, social media, and in a press release in an effort to distinguish their company from brokers that restricted trading during that period. For example, in a Reddit “Ask Me Anything,” Pipitone said, “That some trading firms are blocking these symbols is disgusting, unprecedented… Our clearing firm tried to make us block you and we refused.”

by SEC Press Release

Richard R. Best Named Director of Division of Examinations

The Securities and Exchange Commission today announced the appointment of Richard R. Best as Director of the Division of Examinations, effective immediately. He has served as the Division’s acting director since March 23, 2022.

by SEC Press Release

Twitter