FTX Trial: Ellison Testifies She Created Seven Versions of Alameda Balance Sheet to Conceal Truth

Did Caroline Ellison and SBF Cook Alameda’s Books to Save the World?

Caroline’s seven-hour long direct questioning delved into how things broke bad for the Empire of Sam. Months before Alameda collapsed, Caroline said she worried the crypto hedge fund’s borrowing of billions of dollars from FTX customers would be both companies’ undoing (she was right). That said, she said she did nothing at the time to stop the lies enabling it. Instead she perpetuated them – she bamboozled Alameda’s lenders with them.

Through a tremendous feat of Grotesquely Atrocious Accounting Principles (G.A.A.P.), Caroline said she cooked up seven flavors of balance sheet to serve lenders like Genesis (a subsidiary of CoinDesk parent Digital Currency Group), who by June 2022 had grown money-hungry in the face of its own possible collapse. Sam chose the seventh. There, Caroline had hidden Alameda’s massive FTX borrows as perhaps more palatable long term loans.

Analysis: Companies fear lawsuits from California’s climate disclosure rules

California Governor Gavin Newsom signed rules into law this month requiring companies that are active in the state and generate revenue of more than $1 billion annually to publish an extensive account of their carbon emissions starting in 2026.

The SEC has drafted its own rules which would not go as far, giving companies discretion over disclosing some emissions they deem not material or not pertaining to their emission reduction targets.

The SEC’s rules would apply to all U.S.-listed companies, and one of the politicians behind the California law estimates that about 1,400 of those would also meet the threshold to report in the state.

The overlap could result in companies including emission information in SEC filings that they would have held back were it not for California’s rules, the regulatory lawyers and experts said. They added that this may expose companies to more SEC and shareholder scrutiny.

SEC Settlements Over Whistleblower Protections Pile Up

As the SEC closed its fiscal year, it filed three separate enforcement actions against companies for purported violations of Rule 21F-17 under the Securities and Exchange Act of 1934, which prohibits persons from impeding whistleblowers from communicating with the agency. The SEC emphasized similar themes to prior enforcement actions involving 21F-17 violations (limitations on right to recover whistleblower awards, restrictions on lodging complaints with the agency and prohibitions on disclosing information outside the company without prior authorization). In this post, we provide an overview of the three actions and offer some key takeaways from the SEC’s orders.

Tesla shareholder lawyers defend $229 million fee bid in board pay case

Shareholder lawyers who want to collect about $229 million in fees for forcing Tesla board members to surrender nearly $920 million in compensation fired back this week at the company for asserting that they are entitled to no more than $63.5 million.

In a new brief, plaintiffs lawyers from Bleichmar Fonti & Auld, Fields Kupka & Shukurov and McCarter & English told Chancellor Kathaleen McCormick of Delaware Chancery Court that Tesla’s arguments for slashing their fees defy both Delaware precedent and Tesla’s own signature on a settlement stipulation that acknowledges the value of the compensation surrendered by the company’s outside directors.

USDR stablecoin depegs to $0.53, but team vows to provide solutions

Real estate-backed stablecoin USDR lost its peg to the United States dollar after a rush of redemptions caused a draining of liquid assets such as Dai from its treasury, its project team has revealed.

USDR, backed by a mixture of cryptocurrencies and real estate holdings, is issued by the Tangible protocol, a decentralized finance project that seeks to tokenize housing and other real-world assets.