Judge in Ripple Securities Litigation Sends Case to Trial

California Judge Breaks With New York Counterpart, Sends Ripple Securities Lawsuit to Trial

In her Thursday ruling, Hamilton said that Ripple’s lawyers urged her to “follow the reasoning” of U.S. District Court Judge Analisa Torres who, in a parallel case in the Southern District of New York (SDNY), ruled that XRP did not meet all the prongs of the Howey Test when sold directly to retail participants on crypto exchanges.

Torres’ ruling constituted a partial victory for Ripple, and was celebrated by many in the crypto industry as a step in the right direction for long-awaited regulatory clarity, as well as a potential precedent for other crypto securities cases. But Torres’ ruling hasn’t seemed to have as much sway as hopefuls once thought it might. Last year, Torres’ colleague in the SDNY, District Judge Jed Rakoff, rejected her ruling in a separate case brought by the U.S. Securities and Exchange Commission (SEC) against Singaporean crypto firm Terraform Labs.

Hamilton, in her Thursday ruling, also broke with Torres’ legal opinion that that XRP sold to “programmatic” (meaning non-institutional) traders was not a security because those traders had no expectation of profits due to the efforts of others, one of the four prongs of the Howey Test.

SEC’s AI Crackdown Signals Trickle of Cases Will Turn to Flood

A spate of recent US enforcement actions is likely just the beginning of a crackdown on companies overhyping artificial intelligence to investors.

Since March, the Securities and Exchange Commission has accused three companies of so-called AI washing, or misrepresenting how they use machine learning and other tools. The moves follow multiple warnings from Gary Gensler, the agency’s chair, and the regulator’s top enforcement attorney over misstatements around the technology.

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“We’re at the point where this is a huge focus of every part of the SEC, including enforcement,” said Brian Daly, a partner at Akin Gump Strauss Hauer & Feld.

Santander Culls WhatsApp From Spanish Investment Bank Phones

Banco Santander SA has removed popular messaging software including WhatsApp from smartphones issued by the company to its investment bankers in Spain, the latest sign of how banks are clamping down on staff communications.

The Spanish lender has recently told the investment banking staff at its Madrid headquarters that unauthorized messaging software needs to be deleted, people familiar with the matter said.

While use of the software had already been banned previously, some employees kept the apps on their phones, raising the possibility they were still using them, the people said. That ultimately prompted the bank to take follow-up action, they said asking not to be named discussing private information.

Selective Disclosure of Information Regarding Cybersecurity Incidents

Last year, the Commission adopted rules requiring public companies to disclose material cybersecurity incidents under Item 1.05 of Form 8-K.[1] Since then, staff in the Division of Corporation Finance have heard assertions that those rules may preclude a company from sharing additional information about a material cybersecurity incident with others, including their commercial counterparties. Apparently, some companies are under the impression that if they experience a material cybersecurity incident, the Commission’s new rules prohibit them from discussing that incident beyond what was included in the Item 1.05 Form 8-K disclosing the incident. That is not the case.

Trump Media Auditor’s Shutdown Strands Nearly 40% of Ex-Clients

Donald Trump’s social media company secured a new auditor within days of the SEC shuttering the firm that had vetted its books. Nearly 40% of BF Borgers CPA PC’s other clients haven’t been so lucky.

Scores of the approximately 180 companies audited by the Colorado firm the Securities and Exchange Commission called a massive fraud and “sham audit mill” in early May have yet to announce they’ve hired new auditors, a Bloomberg Tax analysis found.

While there’s no set deadline to secure a new auditor, going without one for too long is considered a financial reporting red flag. Failure to issue audited financial statements hinders a company’s ability to raise cash and stay listed on public exchanges.

The approximately 70 former BF Borgers clients that remain in auditor search mode range from Nasdaq-listed Japanese luxury real estate developer Lead Real Estate Co. to aspiring hoverboard seller MoveIX Inc., traded on the pink sheets, according to a Bloomberg Tax review of securities filings.

U.S. House Members Visit Detained Binance Exec Tigran Gambaryan in Nigeria, Call for Release

U.S. lawmakers Rep. French Hill (R-Ark.) and Rep. Chrissy Houlahan (D-Penn.) visited Tigran Gambaryan in a Nigerian prison on Wednesday as the Binance executive remains incarcerated facing money-laundering charges due to his involvement with the crypto exchange.

Visiting the country to discuss anti-terrorism efforts,”we also had the opportunity to advocate for an American that’s been wrongfully detained by the Nigerian government in the horrible prison that we got to go see, that’s called Kuje prison,” Hill said in a video posted to his X account on Thursday.