ESG Fight: Texas Bans Companies, Funds that "Boycott Energy Companies"

Texas bans BlackRock, UBS, others over ESG investing

On Wednesday, Texas Republican Comptroller Glenn Hegar released a list of 10 companies and 348 investment funds that will be barred from doing business with the state because they “boycott energy companies.”

The list follows enactment of a law last year prohibiting most state agencies and local governments from contracting with such firms.

BlackRock, Credit Suisse and UBS made the banned list, along with sustainable investment funds from other banks.

Statement by SEC Chair Gary Gensler on Agreement Governing Inspections and Investigations of Audit Firms Based in China and Hong Kong

This agreement announced today brings specificity and accountability to effectuate Congress’s intent. It provides the standards against which to judge whether auditors of Chinese issuers have complied with the requirements of U.S. law, including PCAOB auditing standards. I thank Congress for their attention to these important matters. In particular, Chinese authorities have committed to four critical items:

First, in accordance with the Sarbanes-Oxley Act, the PCAOB has independent discretion to select any issuer audits for inspection or investigation;

Second, the PCAOB gets direct access to interview or take testimony from all personnel of the audit firms whose issuer engagements are being inspected or investigated;

Third, the PCAOB has the unfettered ability to transfer information to the SEC, in accordance with the Sarbanes-Oxley Act; and

Fourth, PCAOB inspectors can see complete audit work papers without any redactions. On this last item, the PCAOB was able to establish view only procedures — as it has done in the past with certain other jurisdictions — for targeted pieces of information (for example, personally identifiable information).

Whistle-Blowers – Bloomberg

We have talked about Jordan Thomas — the lawyer who designed the whistleblower program at the SEC and then left to be one of its main beneficiaries — before; I wrote: “This is a good trade — build a spigot of government money and plant yourself in front of it.” If you currently work at the SEC, I suppose you have incentives to increase the flow out of the spigot so that one day you too can plant yourself in front of it.

SEC Charges Infrastructure Company Granite Construction and Former Executive with Financial Reporting Fraud

The Securities and Exchange Commission today charged Granite Construction, Incorporated and its former Senior Vice President, Dale Swanberg, with fraud for inflating the financial performance of the major subdivision Swanberg managed. In 2021, Granite restated its financial statements from 2017 through 2019 to correct revenue and profit margin errors allegedly caused by Swanberg’s misconduct. The company agreed to pay $12 million to settle the SEC’s charges.

In separate administrative proceedings, the company’s former CEO, James H. Roberts, and former CFOs, Laurel Krzeminski and Jigisha Desai, while not charged with misconduct, agreed to return more than $1.4 million, $327,000, and $176,000, respectively, in bonuses and compensation to Granite. These clawbacks were made pursuant to Section 304 of the Sarbanes-Oxley Act (SOX), which requires executives to reimburse certain compensation when an issuer is required to restate its financials as a result of misconduct.

Nasdaq to Defend Board Diversity Push After California Setbacks

A three-judge panel of the US Court of Appeals for the Fifth Circuit will hear oral arguments on Monday in an appeal of a Securities and Exchange Commission decision approving new Nasdaq Inc. rules. The tech-heavy stock exchange is requiring its listed companies to have diverse corporate boards or explain why they don’t.

The conservative Fifth Circuit has an opportunity and the power to slow recent growth in women and minorities on corporate boards, as Nasdaq regulations at stake cover thousands of publicly listed US companies. More than a dozen Republican attorneys general and corporate giants—including rule proponents Microsoft and Starbucks—are closely watching the case.

What Is ‘the Merge’?

Ethereum, the most popular crypto platform, is set to unveil a new technological infrastructure next month that is designed to reduce its energy consumption by more than 99 percent.

The upgrade, called the Merge, is one of the most eagerly anticipated events in crypto’s history. But the process is complicated and carries significant risks.

Here’s what to know about it.

Tornado Cash Was the Key Laundering Tool for NFT Scams, Elliptic Says

Tornado Cash, a cryptocurrency mixer that was recently slapped with US sanctions, was the preferred tool for laundering illicit proceeds from nonfungible token scams prior to the ban, according to blockchain analytics firm Elliptic Enterprises.

The mixer “was the source of $137.6 million of cryptoassets processed by NFT marketplaces and the laundering tool of choice for 52% of NFT scam proceeds before being sanctioned,” the firm wrote in a report released Wednesday. Services offered by platforms like Tornado Cash can be used to mask transactions by mixing tokens from different sources before transferring them to the ultimate recipients — making them a popular tool among illicit actors. Tornado Cash didn’t immediately return a request for comment.