New FTX CEO Says Bankman-Fried Still Living "Life of Delusion" About Harm Caused

FTX’s caretaker boss blasts Sam Bankman-Fried’s ‘life of delusion’ ahead of sentencing

In a fiery letter to Judge Lewis Kaplan, who is due to pass sentence next week, John Ray said Bankman-Fried had run FTX “with hubris, arrogance, and a complete lack of respect for the basic norms of the law, which is all the more inexcusable given his privileged upbringing”.

He said the contention by the 32-year-old’s lawyers that the “harm to customers, lenders, and investors is zero” was “categorically, callously, and demonstrably false”.

SEC Hits Two Investment Advisers With “AI Washing” Enforcement Actions

My point here is that AI, in addition to representing an emerging technological opportunity, also potentially brings with associated risks for corporate and securities litigation. Among these risks are the risk of AI-related SEC enforcement action; indeed, the SEC has taken unusually proactive steps to reinforce the message that it is monitoring and policing AI-related disclosures. But in addition to the possibilities for SEC enforcement action, companies making statements about their adoption of AI or their AI capabilities also face the risk of separate corporate and securities litigation, including in particular private securities class action litigation.

It is clear that these days any list of emerging D&O liability exposure risks has to have AI at or near the top of the list.

FTX Probe to Test Whether Law Giant is Tainted by Conflicts

Cleary’s investigation will examine whether there are conflicts of interest involving Sullivan & Cromwell “which were not adequately addressed” when the firm applied to be lead counsel, according to a proposed Justice Department order. A central feature of the review will likely be whether the firm intentionally or recklessly omitted things about its FTX relationship, Frisch said.

The Trustee has also asked Cleary to look at past investigations by FTX’s new management team, its creditors and government regulators, and to scrutinize if additional employees of Bankman-Fried’s failed crypto exchange were involved in fraudulent activity before its collapse in November 2022. Cleary will also review any investigations conducted around FTX’s use of its native token, FTT, to inflate its value, and make recommendations if further inquiries are needed.

Fewer Lawsuits Ease Public Pathway as Reddit Wakes Up IPO Market

“The decrease in the number of parallel or state court filings jumps out,” said Robert Fumerton of Skadden, Arps, Slate, Meagher & Flom LLP in New York. “I think it’s obviously attributable, in large part, to companies putting federal forum selection clauses in their registration documents and the willingness of courts to enforce them,” he said.

Those forum selection clauses blocking state-court suits may be reducing IPO litigation in federal courts as well. If weaker cases used to migrate to state court because federal courts had more expertise in evaluating securities claims, “then cases that are more likely meritless will not get filed” with state courts now unavailable, said Joseph Grundfest of Stanford Law School.

Fumerton also pointed to legal changes making state courts, particularly in New York, not “a more hospitable forum for plaintiffs than federal court.” New York state courts have been dismissing cases and imposing discovery stays under the Private Securities Litigation Reform Act, he said.

Ethereum Foundation Gets SEC Scrutiny in Latest Crypto Crackdown

The US Securities and Exchange Commission has demanded information from companies about dealings with the Ethereum Foundation as part of a review of aspects of Ether — the world’s second-biggest cryptocurrency, according to people familiar with the matter.

The recent SEC inquiry may represent a significant escalation by Wall Street’s main regulator in its multiyear crackdown on the crypto industry. The agency’s chair, Gary Gensler, says many digital assets are unregistered securities subject to SEC rules. He’s refused to say if Ether is part of that group.

”Ask a Recruiter” — In-House & Law Firm Recruiters: What’s the Difference?

I routinely hear from law firm partners and government attorneys seeking assistance landing in-house roles – and they often seem surprised to learn that I can’t help them. After all, I’m a legal recruiter, right? Well, yes, that’s true. But the gulf between legal recruiters who place candidates at law firms and those who assist companies in filling in-house vacancies is wide.

Let’s walk through these differences.

The first thing to remember is that law firms are profit centers while in-house general counsel’s offices are cost centers. As a profit center, a firm that adds another partner is making what it hopes will prove a lucrative business decision. (A whole group? Cha-ching!) As a result, law firms will consider strong individual applicants or groups at any time. They can be “opportunistic” about hiring talented practitioners even if they are not actively looking for specific expertise. In-house lawyers, on the other hand, are typically brought on to fill a specific need or gap in expertise, and it’s hard to know if and when a company is in hiring mode….