Democrats Try to Use Crypto Market Structure Bill Negotiations to Get SEC and CFTC Vacancies Filled

A few Republicans have crypto’s destiny in their hands at the SEC, CFTC

… the absence of a bipartisan slate of commissioners at the CFTC and SEC has become a sticking point for crypto legislation in the U.S. Senate.

One of the remaining points of debate over the bill that could establish a U.S. crypto regulatory regime is the Democrats’ demand that their party’s vacancies be filled at the two agencies. It’s unclear how much Republicans are prepared to give on that. For his part, Trump has been less than illuminating.

When asked recently whether he’d be willing to make Democratic nominations, he answered with a question, “Do you think they would be appointing Republicans if it were up to them?”

The historic answer is that presidents of both parties have routinely made nominations from both, often in package deals negotiated in Congress that result in multiple confirmations at once.

Maduro raid raises possible insider trading problem in prediction markets

A major bet on Nicolás Maduro’s capture before the Venezuelan president was seized in an American military raid shows how prediction markets pose a controversial new opportunity for insiders to profit on secret information.

Why it matters: Insider trading on the stock market is illegal, while insider trading on prediction markets is generally not — at least for now — and critics say that’s a problem. […]

Reality check: Just because someone made a lot of money on the Maduro bet doesn’t necessarily mean it was a government insider.

Gouker noted in his newsletter, Event Horizon, that news of the planned raid had leaked to multiple media outlets, posing “the possibility that someone outside of government used the information to trade on it.”

Threat level: Markets that are vulnerable to insider trading may also be vulnerable to manipulation for counterintelligence purposes.

In the same way that an insider could make money on anticipating a military operation, governments could flood prediction markets with money to mislead their enemies into believing that an attack is imminent in a location where it is not.

AI Demands Attention From Corporate Boards to Avoid SEC Scrutiny

Every few years brings a shiny new source of systemic risk, and public companies have a well-worn habit of falling behind the curve. The sequence is almost predictable: The technology gains traction, and investors push for transparency.

Companies then get ahead of themselves in published statements while plaintiff’s lawyers and the SEC begin testing and challenging those statements. As a result, corporate disclosures and governance structures get rebuilt under pressure.

We’ve seen this cycle play out with Y2K, perks cybersecurity, Covid-19, special purpose acquisition companies, climate, crypto, and environmental, social, and governance. AI presents another turn in that cycle, but boards have the opportunity to break it—if they act before the scrutiny arrives.

Elon Got His Money

This strikes me as basically a correct analysis. As I wrote two years ago, when the Delaware Chancery Court struck down the pay package, “there is something awkward about a judge second-guessing the CEO compensation decisions of the board of directors of a $600 billion company,” particularly when shareholders (twice!) approved those decisions.

It is also in its way a very Elon Musk analysis. Of course Tesla did not follow every technical nicety of corporate law or fiduciary duty; that’s not how Elon Musk operates. Of course the transaction was conflicted and the board gave him an unprecedented and probably unnecessary pile of money. But (1) he’s Elon Musk, (2) it’s Tesla and (3) it all kind of worked out: Tesla really did create a trillion dollars of value for the shareholders, so they have no cause to complain and almost none of them did. (The plaintiff owned nine shares!) So, you know, no harm, whatever.

SEC Public Companies Enforcement: FY 2025 Review and What to Expect in 2026

With 2025 ending, it appears that Atkins followed through on his promise to realign the SEC’s enforcement priorities to return to the SEC’s core mission of pursuing clear-cut rule violations in an effort to bolster investor protection, with a focus on traditional fraud as opposed to technical violations, such as books-and-records infractions. This resulted in a sharp decline in public company enforcement. A recent Cornerstone report showed that in FY 2025, the SEC initiated 56 actions against public companies and their subsidiaries, 52 of which were initiated prior to Chairman Gary Gensler’s departure on January 20. Only two enforcement actions were initiated after Atkins became chairman, and he recused himself with respect to one of the charging decisions.

In addition to a decrease in new public company enforcement actions, 2025 also saw the SEC retreating from Gensler-era initiatives in crypto and cybersecurity enforcement. Since January, the SEC has closed most of its crypto investigations and enforcement actions, which Atkins has characterized as “the previous administration’s regulation-by-enforcement crusade.” On November 20, the SEC terminated its long-running litigation against SolarWinds and its chief information security officer relating to SolarWinds’ cybersecurity disclosures.

Looking ahead to 2026, we expect the SEC to prioritize charging individuals responsible for misconduct rather than imposing corporate penalties. We also expect a continued focus on insider trading, especially in the biotech sector. Finally, as discussed in our October 28 blog post, foreign issuers listed on US stock exchanges will likely face continued close scrutiny, particularly where “pump and dump” schemes are suspected.