FTX Customers to Recover 118% of Assets They Stored on FTX

FTX Customers Poised to Recover All Funds Lost in Collapse

Customers of the failed cryptocurrency exchange FTX are poised to recover all of the money they lost when the firm collapsed in 2022 and receive interest on top of it, the company’s bankruptcy lawyers said on Tuesday.

The announcement was a landmark in the attempt to recover the $8 billion in customer assets that disappeared when FTX imploded virtually overnight, setting off a crisis in the crypto industry. Under a plan filed in federal bankruptcy court in Delaware, virtually all FTX’s creditors, including hundreds of thousands of ordinary investors who used the exchange to buy and sell cryptocurrencies, would receive cash payments equivalent to 118 percent of the assets they had stored on FTX, the lawyers said.

Those payments would flow from a pool of assets that FTX’s lawyers have pulled together in the 17 months since the exchange collapsed, the lawyers said.

The SEC as an Entrepreneurial Enforcer

The truth of disclosures by public companies is policed by both private plaintiffs and the Securities and Exchange Commission (SEC). The courts and many commentators have viewed the SEC as a more responsible enforcer than private litigants. Entrepreneurial enforcers with a profit motive have an incentive to advance questionable legal theories to expand the reach of Rule 10b-5, the primary federal prohibition of securities fraud. In contrast, the conventional view is that a public enforcer will bring straightforward cases against public companies. This Article argues that this perception is dated and that the SEC has become more entrepreneurial in its enforcement relating to material misstatements by issuers. The agency now routinely avoids doctrinal limitations on the reach of Rule 10b-5 and brings cases that disagree with established precedent. Part of the reason for this shift is the SEC’s increasing emphasis on penalty collection. Another factor is that the SEC is advancing a more ambitious regulatory agenda. A more entrepreneurial approach has increased the impact of SEC enforcement and addressed criticism that the agency is too passive. However, to maintain the legitimacy of its enforcement program, the SEC should take steps to increase the transparency of its enforcement decisions.

Pfizer wants the $75 mln left from SAC Capital’s insider trading settlement with SEC

Pharma company Pfizer told a New York federal judge on Monday that it is entitled to recoup about $75 million from the U.S. Securities and Exchange Commission’s $600 million settlement with now-shuttered hedge fund SAC Capital because it was victimized by SAC’s insider trading.

The SEC said in March that the $75 million was left over after the distribution of about $531 million to investors in pharma companies Wyeth and Elan, which had partnered in the development of an Alzheimer’s drug.

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The company’s lawyers at Skadden, Arps, Slate, Meagher & Flom argued that a Wyeth insider betrayed his duty to the company when he fed secret clinical data to the SAC portfolio manager. (The insider, a medical consultant, entered a non-prosecution agreement with the government.)

“The SEC has not argued — nor can it — that the U.S. Treasury is more of a victim than the company whose fiduciary misappropriated the results from a crucial clinical trial,” Pfizer argued. “Given that this harm stemmed from a breach of fiduciary duty owed to Wyeth, Wyeth is the ‘next best’ recipient of the fair fund.”

Crypto Mixers Targeted in U.S. House Democrats’ Effort to ‘Clamp Down’ on Money Laundering

Several Democrats on the House Financial Services Committee have a bill coming this week to target money laundering through cryptocurrency mixing services, said Rep. Sean Casten (D-Ill.), one of its backers.

The legislation will “clamp down on mixers,” Casten said of the bill during a hearing Tuesday on U.S. securities enforcement practices, adding that the effort will also be supported by Reps. Brad Sherman (D-Calif.), Emanuel Cleaver (D-Mo.) and Bill Foster (D-Ill.)

“The presumption should be that these are money laundering channels,” Casten said, unless sufficient audit work shows otherwise. “Let’s go through and get that cleaned up and fixed.”

From Richard Teng, Binance CEO: Tigran Gambaryan is Innocent and Must Be Released

As you may be aware, one of our beloved colleagues, Tigran Gambaryan, continues to be held by the government in Nigeria for more than 70 days. There has been much public commentary on this episode, and I wanted to take this opportunity to provide the facts so that the global community’s perception may not be distorted unfairly. I also feel that it’s time to speak out about this issue on behalf of the global business community. To invite a company’s mid-level employees for collaborative policy meetings, only to detain them, has set a dangerous new precedent for all companies worldwide.

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Finally, it is important to note that Tigran did not go to Nigeria as a “decision-maker,” nor a “negotiator.” He was merely acting as a functional expert in financial crime and capacity building in policy discussions.