ProPublica's Deep Dive into Executives Trading in Competitors' Stock

Execs Make Millions via Timely Trades of Competitors’ Stock

The Medpace executive is among dozens of top executives who have traded shares of either competitors or other companies with close connections to their own. A Gulf of Mexico oil executive invested in one partner company the day before it announced good news about some of its wells. A paper-industry executive made a 37% return in less than a week by buying shares of a competitor just before it was acquired by another company. And a toy magnate traded hundreds of millions of dollars in stock and options of his main rival, conducting transactions on at least 295 days. He made an 11% return over a recent five-year period, even as the rival’s shares fell by 57%.

These transactions are captured in a vast IRS dataset of stock trades made by the country’s wealthiest people, part of a trove of tax data leaked to ProPublica. ProPublica analyzed millions of those trades, isolated those by corporate executives trading in companies related to their own, then identified transactions that were anomalous — either because of the size of the bets or because individuals were trading a particular stock for the first time or using high-risk, high-return options for the first time.

SEC Charges Cannabis Company American Patriot Brands, CEO, and Others with Fraud

The Securities and Exchange Commission today charged American Patriot Brands Inc. (APB), a cannabis cultivation and distribution company, its CEO, and five other entities and individuals for their participation in a long-running scheme in which they raised more than $30 million from more than one hundred investors across the country and siphoned off millions of those funds to enrich themselves.

According to the SEC’s complaint, filed in the United States District Court for the District of Puerto Rico, since at least mid-2016, APB, its CEO Robert Y. Lee, and current and former executives Brian L. Pallas and J. Bernard Rice made a series of false and misleading statements to investors about various aspects of the company, including its financial condition, the scope of its operations, the value of its Oregon cannabis farm, and the safety and security of investing in APB. The complaint alleges that APB funneled millions in investor proceeds to the APB executives’ personal accounts and spent tens of thousands on the executives’ personal expenses.

Supreme Court Crypto Case Over Coinbase Is First of Many ExpectedThe biggest issues stem from efforts by the Securities and Exchange Commission to classify cryptoassets as securities, putting them under the federal regulator’s purview. Although the SEC has won some early battles, it could get more skepticism once it reaches the Supreme Court, which has repeatedly curbed the power of federal regulatory agencies.

“Eventually, one of them is going to get up to the Supreme Court,” said Bloomberg Intelligence litigation analyst Elliot Stein. “And I think the current Supreme Court is probably eager in some ways to rein in what a lot of industry folks consider to be a very aggressive SEC.”

Ex-Theranos exec finds way to delay start of prison sentenceJust hours before Balwani was supposed to surrender to authorities, his lawyer filed documents notifying U.S. District Judge Edward Davila that he wouldn’t be doing so.

The notice cited a last-minute appeal of a recent Davila ruling rejecting Balwani’s request to remain free while trying to overturn his conviction on 12 counts of fraud and conspiracy. The Wednesday appeal of Davila’s March 9 ruling triggered an automatic stay of his prison reporting date, which had been set for 2 p.m. PT Thursday.

That’s because Balwani, 57, has been free on bail since a jury convicted him last July, triggering a clause that allows him to remain free on bail until the Ninth Circuit Court of Appeals weighs in on Davila’s ruling issued last week, according to the notice filed by Balwani’s attorney, Jeffrey Coopersmith.

KPMG Gave First Republic a Clean Audit Weeks Before Bailout

Listen Print Email First Republic Bank—which came back from the brink Thursday thanks to a $30 billion emergency bailout from other lenders—shares a link with two other banks that foundered within the past week. All three used KPMG LLP as their auditor—and each had recently received a clean bill of health from the firm.

First Republic’s reprieve— from a combination of megabanks including JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc. and Wells Fargo & Co.—comes after its stock was hammered for days, wiping away billions in market value, sending customers fleeing.

KPMG signed off on the institution’s 2022 financial statements on Feb. 28 but didn’t raise any red flags that the bank’s survival was at risk.

Investors Flock to Tokenized Diamond as Crypto Banking Crisis Props Hard Assets

The collapse of three prominent U.S. banks over the weekend led to market volatility and a lot of uncertainties as to where investors could stash their cash. Gold, the age-old safe haven, saw a boost in prices by about 5% since last week, and another asset that caught investors’ attention was diamond – digitized diamond.

Diamond Standard, a blockchain company that tokenized and standardized the diamond market to allow investors buy the previously hard-to-invest-in gemstone, said it saw a large spike in its marketplace after the banks started to shut down.

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The company gathers physical diamonds together in a “coin” of standardized value that’s stored in a vault. Each holds eight to nine diamonds. The diamond-embedded tokens are digitized through an Ethereum-based digital coin, bitcarbon, which is tradable on different exchanges.

Ethereum co-founder praises Gary Gensler as ‘shining knight of decentralization’

Ethereum co-founder Joseph Lubin praised SEC Chair Gary Gensler as a “shining knight of decentralization.”

Speaking at ETHDenver (which ended on March 5,) Lubin spoke candidly about recent regulatory enforcement actions, holding Gensler as a catalyst for driving decentralization – much to the audience’s jeers.

FDIC Denies Report Signature Bank Purchaser Must Divest Crypto

The Federal Deposit Insurance Corporation denied it would require any purchaser of Signature Bank to divest its crypto activities.

The FDIC responded to a Wednesday Reuters report which said “any buyer of Signature must agree to give up all the crypto business at the bank,” citing two unnamed sources. An FDIC spokesperson denied this to Reuters.

Signature Bank Music Videos Show Employees Singing About ProfitsThe scene cuts to a theater stage. “What possible fate will become of our bank?” a chorus belts. “Other than to diminish and fail?”

Chairman Scott Shay pops up, shaking his head. “I happen to know for a fact that won’t happen.”

It did happen. On Sunday, the third-biggest failure in US banking history marked the downfall of a group of outer-borough, blue-collar bankers who leaped into the crypto business in recent years and saw depositors flee. But long before then, Signature had been unlike any other in New York’s finance industry. The 2016 video, which shows employees doing a synchronized dance inside cubicles, is just one of several.

Shay had no comment and the bank didn’t immediately respond to a request for one.

Another clip, made for the bank’s 10th anniversary a decade ago, begins with the cash-register sound effects from Pink Floyd’s “Money.” Then a man in a Viking outfit buys a hotdog. Women in red bowties ride an elevator that opens onto a bank office. A child uses a sword to strike a printer that spits out, letter by letter, the bank’s name.