ESG Lawyers in High Demand

Thanks to the SEC, Law Firms See Increasing Business in ESG

The present feels like a watershed moment in the prominence of ESG, [Kristyn] Noeth said. It’s also a time of uncommon law firm and in-house lateral movement in her practice—Noeth herself joined Mintz from Paul, Weiss, Rifkind, Wharton & Garrison earlier this month.

Skadden, Arps, Slate, Meagher & Flom and Arnold & Porter Kaye Scholer each hired SEC enforcement lawyers the week of the SEC’s climate disclosure announcement. In May, Steptoe & Johnson hired SEC veteran Coy Garrison, former counsel to pro-cryptocurrency Commissioner Hester Peirce. Willkie Farr & Gallagher added two former SEC lawyers in June with a combined 25 years of experience, Kristina Littman and Adam Aderton. And Placenti arrived at Greenberg this month after 15 years at the helm of Squire Patton Boggs’ corporate governance practice.

The SEC "Special Ops" of Enforcement: Five Cases Identified by Analysis and Detection Center

One cannot help but ponder the busy activities of the SEC and of the U.S. Attorney for the SDNY in the last week of July.  Indeed, the number of insider trading enforcement actions in the four days from Monday to Thursday has been the subject of articles in the financial press like the Wall Street Journal, as well as in the business pages of metropolitan dailies such as The Philadelphia Inquirer. It seems a bit Orwellian, but in securities transactions, the MAU’s ADC is, like Big Brother, “watching you.”

SEC Awards More Than $16 Million to Two Whistleblowers

The Securities and Exchange Commission today announced awards of more than $16 million to two whistleblowers who provided information and assistance in a successful SEC enforcement action.

The first whistleblower prompted the opening of the investigation and provided information on difficult-to-detect violations. This whistleblower also identified key witnesses and provided critical information, which helped staff in their investigation. As a result, this whistleblower will receive an award of approximately $13 million. The second whistleblower submitted important new information during the course of the investigation and will receive an award of more than $3 million.

As Government Takes on the Tornado Mixer, It May Reap a Whirlwind

… Monday, the U.S. Office of Foreign Assets Control (OFAC) placed a decentralized privacy service called Tornado Cash on its Specially Designated Nationals list. This makes interacting with the service illegal for U.S. nationals and entities.

But the impact and even intent seem even broader than that: Tornado Cash developer Roman Semenov claimed Tuesday his Github code repository account had been suspended. Semenov has not personally been sanctioned by OFAC, and he plays no direct role in the Tornado Cash service. Instead, he has coordinated the creation of code that can be run by other people to form a decentralized network. Writing on Twitter, Semenov nailed the key question raised by his reported suspension:

“Is writing open-source code illegal now?”

MicroStrategy Explored Options From Art to Real Estate Before Bitcoin Buys, New CEO Says

New MicroStrategy CEO Phong Le backed up Michael Saylor’s decision to hold bitcoin on the company’s balance sheet.

Speaking Tuesday at a conference sponsored by investment bank Canaccord Genuity, Le said that prior to first purchasing bitcoin (BTC) in August 2020, MicroStrategy considering purchasing Treasurys, corporate bonds, gold, commodities, real estate and even artwork.

Digital assets, however, kept popping into management’s conversations, Le said. “We at our core are inventors, we’re innovators,” he said, explaining why bitcoin won out.

Iran Plans Uses Crypto for Imports to Get Around Sanctions

The latest crypto bro on the block happens to be the country of Iran. Reports from the Tasnim news agency Tuesday said that, according to the country’s head of its Trade Promotion Organization Alireza Peyman-Pak, the country made its first official import order using crypto worth $10 million. Further, the official said they will be making widespread use of “cryptocurrencies and smart contracts” for foreign trade with “target countries” by the end of September.

It’s likely the largest publicized crypto transaction of this scale made by any one nation. It may also be the first transaction of many that would bypass U.S. sanctions on the country, and—as Reuters put it—trade with similarly sanctioned countries such as Russia. The U.S.’ sanctions on Iran include practically all imports.

Coinbase Executives Misled Shareholders About Public Listing, New Lawsuit Alleges

The lawsuit filed in Delaware, where Coinbase was incorporated, states the company made misleading statements in its registration form with the SEC, filed in February 2021, months before the direct listing. The suit points specifically to the alleged failure of Coinbase’s growth strategy, referred to as “flywheel” in the file.

“Our unique approach draws retail users, institutions and ecosystem partners to our platform, creating a powerful flywheel: retail users and institutions store assets and drive liquidity, enabling us to expand the depth and breadth of crypto assets that we offer, and launch new, innovative products and services that attract new customers,” Coinbase said in its SEC registration statement.

But the increased volume on Coinbase ruptured its “flywheel” cycle, the suit alleges, adding that the crypto exchange increasingly suffered system disruptions and delays due to heavy demand. However, the complaint only references six such disruptions in 2019 and 12 incidents in 2020 in support of its claim. Coinbase went public in 2021.