IPO Drought Slams Law Firm Revenue by $575 Million

The IPO Bust Blew a $575 Million Hole in Law Firm Revenue

A total of 724 US companies paid their lawyers $640 million for work on IPO registrations in the first three quarters of last year, according to data compiled by Bloomberg and an analysis by Bloomberg Law.

The drop-off this year is eye-watering: A mere 66 companies reported paying their lawyers $64 million.

That’s $575 million less in lawyer fees, and just 10% of the amount from a year ago.

The plummeting legal fees mark an end to a steady expansion of company-side IPO legal fees for US law firms. Fees had grown from $207 million in 2018 to $308 million in 2020 before more than doubling last year, amid a boom in IPOs and blank-check companies, which raise money through a publicly traded company that’s spent purchasing a private business.

Gary Gensler the Righteous Man

Samuel L. Jackson’s character Jules Winnfield in the Quentin Tarantino classic, Pulp Fiction, famously described himself as the “righteous man.” SEC Chairman Gensler is viewed by some as the FinTech version of the righteous man. In a recent speech, Gensler quoted the first Chairman of the SEC, Joseph Kennedy who noted: “No honest business need fear the SEC.” Unfortunately, Gensler failed to note that as the SEC often explains, whether a party has violated the securities laws depends on a facts and circumstances analysis. Consequently, whether a party must fear the SEC will also depend on the facts and circumstances. Chairman Gensler also failed to mention the other missions of the SEC and to acknowledge the important role of self-regulation.

Elon’s Back

Why? Why would you spend this much time and money trying to get out of the deal, and be this annoying about it, and then just unconditionally surrender two weeks before trial? One possibility is that it became increasingly obvious to Musk that he was going to lose the trial, and that didn’t seem fun, so he seized the initiative (?) by surrendering instead. If this did go to trial he’d have to testify (and be deposed this week), his text messages with his friends have become public and more might come out, and the whole thing would be more distracting, unpleasant and embarrassing than he really wanted.

Similarly, Jessica Lessin’s theory is that Musk “has bigger challenges to contend with elsewhere. Spending hours and hours preparing for a trial everyone thought he was going to lose didn’t rank high on the list.” Musk’s efforts not to buy Twitter were becoming too distracting, so he decided to become the owner (and interim chief executive officer!?) of Twitter instead to minimize distraction. That seems right. Sure, running Twitter will be distracting and time-consuming, but in a fun way. Trying to get out of running Twitter was probably fun initially, but now it has become a drag.

Spare a thought for Kim Kardashian

An unusual sequence of words popped into my mind this week: poor Kim Kardashian. At the risk of losing you before I’ve begun, I would like to ask that you spare a thought for a woman who is mainly famous for being famous (and for being rich).

It has emerged that this week Kardashian settled with the US Securities and Exchange Commission over the charge of “unlawfully touting” a “crypto security”, with a fine of $1.26mn, or about 0.07 per cent of her reported net worth of $1.8bn.?(Cue the sound of tiny violins.)

But it is not the size of the fine that I believe makes Kardashian worthy of a second thought, nor the suggestion that the charge could impinge on her ambitions to become a lawyer. It’s that the transgression she has been charged with is negligible when you compare it with the level of grift, dishonesty, exploitation and outright fraud that goes on every day, largely unpunished, in the world of crypto.

US CFTC as Crypto’s Regulatory Savior? Crypto Firms Might Not Like What They Get

But Behnam is a federal regulator installed by the same president that picked Securities and Exchange Commission (SEC) chief Gary Gensler, who is held up by the crypto industry as its governmental antagonist. Gensler’s SEC is often accused of regulating crypto through enforcement actions, and it’s showing signs that it only intends to speed up that process. While Behnam had been seen as the gentler hand who was less openly scornful of the digital-assets movement, his agency has been waging an enforcement battle that belies that reputation.

“If somebody thinks you’re going to get a pass at the CFTC, I think that’s a mistaken belief,” said Gary DeWaal, a former CFTC enforcement lawyer now at Katten Muchin Rosenman. “Any violation is going to be met with enforcement actions by either regulator, and they’re going to be severe.”

The Stock Market Made Nancy Pelosi Rich. Now, She Wants To Ban Her Colleagues From Trading.

House Speaker Nancy Pelosi (D., Calif.) has seen her net worth increase by $140 million since the 2008 financial crisis thanks in no small part to her husband’s fortuitous trades in companies she has worked to subsidize. Now, she’s trying to pull up the ladder behind her: In what may be her final months as a member of Congress, she’s backing a proposal that would prohibit her colleagues from buying or selling individual stocks.

US Crypto Legislation Stalls in Congress, Dashing Hopes for Regulatory Clarity

US lawmakers’ efforts to pass significant crypto legislation by the end of the year are on life support, leaving in place Washington’s scattershot approach to digital coins.

Several high-profile, bipartisan bills that once seemed to have a promising shot of passing before the end of 2022 are held up, with congressional committees pushing off important votes. And now with lawmakers squarely focused on next month’s elections, their chances of becoming law in 2022 have all but evaporated.