The Impact of the SolarWinds Ruling on the SEC's Investigations of Cyber Incidents

‘This Is Not Going Away’: Smackdown in Novel Cybersecurity Case Unlikely to Send SEC Into Retreat

Swaminathan said the ruling suggests a limit on what the SEC can demand from companies in their disclosures. “The judge wholly rejected theories that are a significant extension of what the law is, and requires,” he said. “If I’m the SEC, I’m probably licking my wounds a little bit.”

But he warned that companies shouldn’t assume that the regulator is going to stop aggressively investigating cyber incidents.

“Notwithstanding the fact that this is a major win for SolarWinds, I don’t think that companies should say that the SEC has been put in its place, and we don’t have to worry about this,” Swaminathan said.

“This is not going away. And while the judge has said these practices that SolarWinds engaged in are acceptable, if I were a client, I would not be resting on my rear and saying, ‘This is just not a big deal anymore,’” Swaminathan said. “This is one judge in one court on one very highly publicized action. But this is not going to necessarily stop the SEC.”

Am Law 50 Law Firms See Uptick in Partner Hiring, With Focus on Funds and White-Collar Practices

Lateral partner hires among Am Law 50 and Magic Circle firms in four major markets are up 9% through the first half of the year, recruiting firm Macrae found. Moves in New York and London, in particular, surged.

Additionally, the number of partner moves in investment management, funds and white-collar defense practices in the four markets has more than doubled from the same time as last year, Macrae said, adding that finance partner lateral moves also increased significantly. Litigation moves decreased, as did private equity.

US SEC does not seek 5th Circuit review of private funds decision, throwing other rules into doubt

The U.S. Securities and Exchange Commission (SEC) has decided not to ask a U.S. appeals court to review a June ruling that said the agency did not have the power to oversee investment advisers, according to a source familiar with the matter and court filings.

The SEC had until the end of Monday to appeal the decision by the New Orleans-based Fifth U.S. Circuit Court of Appeals, which decided 3-0 to vacate the SEC regulation which would have imposed more transparency on private fund fees.

The SEC had not filed a petition by the end of Monday, according to the Fifth Circuit docket, and one person familiar with the matter said the agency had decided not to ask the court to review the ruling. An SEC spokesperson declined to comment.

The decision throws into question whether the SEC can proceed with a handful of other rules for investment advisers, although the agency could still appeal to the Supreme Court.

Australian Regulator Sets Up Squad in Insider Trading Crackdown

Australia’s securities regulator will establish a new team dedicated to insider trading investigations as it ramps up efforts to crack down on market manipulation.

The Australian Securities and Investments Commission will target “pump and dump” schemes, intervene in chat rooms, and review “finfluencer” activity among other things, according to its latest market cleanliness report released on Wednesday. The watchdog said it’s nearly doubled the number of new insider trading investigations in the current financial year compared with last year.

The new structure puts fresh focus on criminal insider trading cases, which require a high evidence bar for getting to prosecution. The specialist squad will be split from a team that currently has a broad remit of policing market misconduct including stock manipulation and corporate disclosure.

With Help From ‘Loper Bright,’ San Francisco Says EPA Misreads Clean Water Act

The ink has barely dried on the U.S. Supreme Court’s Chevron-killing decision in Loper Bright Enterprises v. Raimondo, but San Francisco is already quoting from Chief Justice John Roberts Jr.’s opinion in a new high court appeal against the U.S. Environmental Protection Agency.

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San Francisco, locked in a legal battle with the EPA over a permit for sewage discharge into the Pacific Ocean, invoked Loper Bright several times in its opening brief to the Supreme Court on Friday. And in something of a twist, the city cited the portion of Roberts’ opinion that actually preserved “due respect” for longstanding agency positions that were taken “contemporaneously” with a law’s passage.

In this case, San Francisco argues the EPA has abandoned that correct position.

Judge deals major blow to SEC’s cybersecurity enforcement stance

In his court ruling, Engelmayer sided with SolarWinds on the Section 13(b)(2)(B) issue, holding that cybersecurity controls are outside the scope of the provision.

“The ruling has significant implications beyond cybersecurity, because the SEC has increasingly charged companies in recent years under this statute based on alleged deficiencies in legal, compliance or risk-management controls unrelated to corporate accounting,” Nicole Friedlander, a partner at Sullivan & Cromwell’s Criminal Defense and Investigations Group and co-head of its cybersecurity practice, said in an email.

Coinbase Narrows Demand for SEC Chair Gensler’s Crypto Messages

Coinbase Inc. (COIN) is going after internal chatter at the U.S. Securities and Exchange Commission (SEC) that may shed light on its pursuit of cryptocurrency exchanges as illegal enterprises – including Chair Gary Gensler’s own communications – but the scope of its latest request filed on Tuesday has been dialed back after resistance from a federal judge.

The company heard the message from Judge Katherine Polk Failla, of the District Court for the Southern District of New York, that she thought Coinbase was going too far in its demands for years of communications from the SEC chief that included messages before he showed up to run that agency. Coinbase Chief Legal Office Paul Grewal said its Tuesday motion is responding to the judge’s points from a hearing earlier this month, but it still seeks the chairman’s correspondence on crypto, any discussions within the various divisions of the SEC and what the agency officials may have talked about before approving Coinbase as a public company.

Ferrari to Extend Cryptocurrency Payments to Europe: Reuters

Ferrari (RACE) will extend its provision for cryptocurrency payments to Europe by the end of July, Reuters reported on Wednesday.

The Maranello, Italy-based luxury sports car manufacturer began accepting crypto in the U.S. last October, in partnership with BitPay. Bitcoin, ether and USD coin were the tokens accepted.

Ferrari is now extending the program to Europe “to support dealers in better addressing the evolving needs of its clients,” Reuters said, citing a company statement.