House Republicans Seek to Turn Tables on SEC Over FTX Investigation

FTX collapse: Top House Republicans scrutinize SEC investigation of failed crypto exchange

Top House Republicans on Friday sent a letter to the Securities and Exchange Commission as Congress scrutinizes the agency’s actions against Sam Bankman-Fried, former CEO of failed cryptocurrency exchange FTX.

In a letter addressed to SEC Chairman Gary Gensler, Reps. Patrick McHenry, R-N.C., chairman of the House Financial Services Committee, and Bill Huizenga, R-Mich., chair of the oversight and investigations subcommittee, demanded records and communications among and between the SEC’s enforcement division, the Justice Department and Gensler’s office on the timing of the charges filed against Bankman-Fried for defrauding his investors and other violations.

Crypto Firm Paxos Faces SEC Lawsuit Over Binance USD Token

The Securities and Exchange Commission has told crypto firm Paxos Trust Co. that it plans to sue the company for violating investor protection laws, according to people familiar with the matter, the latest move in the agency’s escalating campaign in crypto enforcement.

The SEC’s enforcement staff issued a letter to Paxos known as a Wells notice, which the agency uses to inform companies and individuals of a possible enforcement action, according to the people.

The notice alleges that Binance USD, a digital asset that Paxos issues and lists, is an unregistered security, according to the people.

Advocacy Group Sues Shell’s Board for Insufficient Climate Change Action

In what it calls the “world’s first” of its type, the environmental advocacy group ClientEarth has filed a shareholder derivative action against the board of Shell plc, claiming that the company’s directors have failed to take sufficient steps to protect the company from the future impacts of climate change. The action seeks to compel the board to “strengthen its climate transition plans, in the best interests of the company in the long term….”

Adani hires US legal powerhouse Wachtell in short-seller battleGautam Adani has hired one of Wall Street’s fiercest activism defence law firms to fight back against claims made by short seller Hindenburg Research, as the Indian billionaire battles to reassure investors about the financial health of his business empire.

In recent days, the Adani Group has tapped senior lawyers at New York’s Wachtell, Lipton, Rosen & Katz to advise it on how to stem the crisis facing the Indian conglomerate since Hindenburg accused it of accounting fraud and stock market manipulation in late January, four people with direct knowledge of the matter said.

The Adani Group’s decision to hire Wachtell, known as one of the most expensive law firms in the US, shows the severe international pressure the group is facing since Hindenburg levelled its claims.

New SEC Rules Target Corporate Insider Trading

Some insiders were selling shares less than a month after adopting their plans, sometimes even the same day, or adopting and initiating trading plans right before earnings announcements. Another trick has been to adopt multiple 10b5-1 plans and later selectively cancel the ones that wouldn’t work to the insider’s benefit. Potential abuses of 10b5-1 plans were the subject of a Wall Street Journal article in June that was cited in the SEC’s final rule.

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Just as the old rule begot new manipulations, the new rule won’t eliminate them all. The SEC noted concern that some insiders might time market-moving disclosures around insiders’ prescheduled trading dates, delaying the release of bad news until after scheduled sales or accelerating the release of positive news so it comes out beforehand.

Mormon Church’s Investment Arm Under Investigation by SEC

The Securities and Exchange Commission is investigating the Mormon Church’s past efforts to keep its giant investment portfolio a secret, a practice that ended after a former employee revealed in 2019 that the church had amassed $100 billion of holdings.

The SEC’s investigation has focused on whether the Church of Jesus Christ of Latter-day Saints, also known as LDS, complied with disclosure requirements for large money managers. It is at an advanced stage and is likely to lead to a settlement in the coming months, people familiar with the matter said.

SEC’s Gary Gensler: Crypto Industry Mixes Customer Funds With Its Own

In his Bloomberg interview on Friday, Gensler took particular issue with how crypto exchanges often play multiple roles. He suggested that their business models can create significant conflicts of interest.

“We don’t let the New York Stock Exchange also run a hedge fund and trade on the exchange; why would we do it here?” Gensler said.

Gensler said that firms should expect additional enforcement actions by the agency unless they start following the regulator’s rules.

I’m Glad There Are No Crypto Super Bowl Ads: Here’s Why

Sportswashing describes groups, corporations or nation-states using the global popularity of sports to improve their reputations by proxy. Think of how Qatar hosted the 2022 FIFA World Cup, the biggest sporting event in the world; how Qatar’s emir owns Paris Saint-Germain which rosters three of the world’s most liked athletes (all from different countries with a combined population of 325 million people); how Russia hosted the 2018 FIFA World Cup and 2014 Winter Olympics; and how China hosted the 2008 Summer Olympics and 2022 Winter Olympics.

In these situations, glitzy spectacles are all designed to shine a favorable light on those groups, corporations or nation-states to mask otherwise unfavorable realities. Super Bowl commercials can have the same flattering effect.

To be sure, I’m not implying that the crypto companies who had Super Bowl commercials last year are hiding human rights atrocities or something like that. But as we’ve learned since the last Super Bowl, many of them were hiding something not great.