Key Case on ALJs reaches U.S. Supreme Court Today

SEC, FTC Risk New Curbs as Supreme Court Eyes Regulators’ Reach

The US Supreme Court is turning its anti-regulatory campaign toward the federal agencies that are scrutinizing Wall Street banks and seeking to break up Meta Platforms Inc., taking up cases that could defang two powerful market regulators.

The justices on Monday will consider whether those facing complaints from the Securities and Exchange Commission or the Federal Trade Commission can go straight to federal court with constitutional challenges to their cases. Most lower courts have said those challenges must wait for an in-house process that can take years — and arguably give the agency an unfair advantage.

A ruling against the government could undercut two of the most potent federal regulators. The SEC filed more than 700 enforcement actions in the last fiscal year and won judgments and orders worth $6.4 billion, including from investment banks.

SEC Charges Trade Coin Club Founding Members With Operating a $295 Million Ponzi Scheme

The Securities and Exchange Commission (SEC) said Friday that it’s charging the founding members of a multi-level marketing organization with operating a $295 million crypto Ponzi scheme.

The SEC is charging Douver Torres Braga, Joff Paradise, Keleionalani Akana Taylor and Jonathan Tetreault for their involvement in Trade Coin Club, which raised over 80,000 bitcoin (BTC) from over 100,000 investors.

Braga, who founded the firm, allegedly deceived investors by telling them they could generate daily returns of 0.35% on their crypto through a bot, but instead used these funds to compensate himself, Paradise, Taylor and Tetreault.

Former CEOs of MoviePass and Parent Company Charged in Securities Fraud Scheme

The indictment alleges Farnsworth and Lowe falsely claimed that MoviePass’s $9.95 “unlimited” plan – in which new subscribers could see “unlimited” movies in theaters with no blackout dates for a flat monthly fee of $9.95 – was tested, sustainable, and would be profitable or break even on subscription fees alone. Farnsworth and Lowe allegedly knew that the $9.95 “unlimited” plan was a temporary marketing gimmick to grow new subscribers and, in turn, artificially inflate HMNY’s stock price and attract new investors. As a result, MoviePass lost money from the $9.95 “unlimited” plan.

In addition, Farnsworth and Lowe allegedly made false claims that HMNY possessed and used technologies – like “big data” and “artificial intelligence” platforms – to generate revenue by analyzing and monetizing the data MoviePass collected from subscribers. However, the indictment alleges that Farnsworth and Lowe knew HMNY did not possess these technologies or capabilities to monetize MoviePass’s subscriber data or incorporate these technologies into the MoviePass application.

Less Trust, More Truth: Polkadot’s Native Token (DOT) Has Morphed and Is Not a Security. It Is Software

Three years ago, in November 2019, Web3 Foundation made a decision that changed its trajectory and led to a transformation in business processes, people management and communications to the general public. We chose to take the U.S. Securities and Exchange Commission (the “SEC”) up on its offer to “come in and talk to us.” Today, we will tell you why. Web3 Foundation is pleased to announce a landmark achievement towards the realization of Web 3.0: the Polkadot blockchain’s native digital asset (DOT) has morphed and is no longer a security. It is software.

ESG Cases Remain Enforcement Priority at SEC, Top Official Says

The SEC remains committed to rooting out wrongdoing by companies and investment funds that mislead investors about environmental, social and governance issues, a senior agency official said Friday.

The Securities and Exchange Commission will continue to file enforcement lawsuits while it works to issue tougher rules to police climate disclosures and other ESG reporting, said Gurbir Grewal, the agency’s Enforcement Division director.

The SEC’s Climate and ESG Task Force has helped with at least three cases involving misleading corporate statements and claims since it was formed in 2021. The matters include enforcement actions against Bank of New York Mellon Corp., health insurance distributor Benefytt Technologies Inc. and Brazilian mining company Vale S.A.

Saying ‘not financial advice’ won’t keep you out of jail — Crypto lawyers

Crypto influencers may need to practice what they preach and “do their own research” when it comes to sharing their crypto tips.

According to several digital asset lawyers, the popular disclaimer “This is not financial advice” may not actually protect them in the eyes of the law.

United States-based securities lawyer Matthew Nielsen from Bracewell LLP told Cointelegraph that while it’s “best practice” for influencers to disclose that “this is not financial advice,” simply saying the term will not protect them from the law, as “federal and state securities laws heavily regulate who can offer investment advice.”

Australian financial regulatory lawyer Liam Hennessy, a partner at Gadens, explained that “advice warnings” are “by and large pretty useless,” while Australian digital lawyer Michael Bacina of Piper Alderman added that they aren’t “magic words which when uttered will disclaim liability.”

Public Companies Should Bet on Whistleblowers to Lower Fines

The Securities and Exchange Commission’s whistleblower rewards program has prompted over 50,000 tip-offs in the last decade that have led to public companies paying almost $5 billion in fines and penalties.

This is an embarrassing and costly state of affairs for some of the world’s most innovative companies, and something needs to change. If public companies want to stem the flow of fines, the solution is simple: Companies need to incentivize whistleblowers to report internally.