Researchers Track Impact of SEC Visits to Firms Using Phone Geolocation Data

Watching the Watchdogs: Tracking SEC Inquiries using Geolocation Data

The Securities and Exchange Commission’s investigative process remains opaque and challenging to study due to limited observability. Leveraging de-identified smartphone geolocation data, we provide new insights into the SEC’s monitoring practices by tracking SEC-associated devices that visit firm headquarters. Our findings reveal that the majority of SEC visits occur outside of formal investigations, with larger firms and those with a history of SEC enforcement actions being more frequently visited. These visits often cluster within industries. Notably, the SEC associated devices venture to firms both within and outside their own regions. On average, these visits are material, evidenced by significant stock price reactions, even in the absence of subsequent formal investigations or enforcement actions. Last, we observe a chilling effect on insider behavior around these SEC interactions; insiders are less likely to sell around visits. However, when sales do occur, insiders avoid substantial losses.

The Harris-Trump Debate Showed How Little Crypto Matters to Voters and Politicians

Presidential debates cover the issues that polling shows are most important – immigration, healthcare, the economy, climate change, and more. So why was crypto not mentioned even once?

Neither the American public nor the two presidential candidates care very much about crypto, and the debate showed that. Despite the industry narrative becoming increasingly partisan, many voters are looking past the simple fact that those outside the fishbowl simply don’t care; and it’s blinding those inside it to a simple fact.

JPMorgan, BofA Roll Out Measures That Could Ease Junior Bankers’ Workloads

Two of Wall Street’s largest investment banks are rolling out measures that may ease junior bankers’ workloads amid complaints across the industry that weekly hours are increasingly creeping past 100.

JPMorgan Chase & Co. will limit junior banker hours to 80 per week in most cases, according to a person with knowledge of the matter. Exceptions may include extra work to complete live deals, the person said.

Bank of America Corp., meanwhile, is launching a new internal platform this month that will more closely monitor individual workloads, according to a person with knowledge of the plan. The firm began testing the so-called banker diary earlier this year.

D.C. Circuit affirms SEC’s denial of whistleblower award to attorney tipster

There are several important takeaways from Doe v. SEC. First, it reinforces that an attorney’s ultimate duty is owed to his or her client. Even if an attorney does not obviously violate ethics rules, an attorney will not be financially rewarded for blowing the whistle absent express client permission under the ethics rules.

Second, the D.C. Circuit’s opinion reflects that attorney-tipsters face a major “uphill battle” in “arguing that intentionally subjecting one’s client to an investigation is in that client’s best interest.” This high bar to award eligibility for attorney tipsters means companies should not be overly concerned that their lawyers will be incentivized to reveal confidential information.

Third, the D.C. Circuit’s opinion clarifies that in determining an attorney’s intentions at the time of making a tip, the SEC is permitted to consider all statements from the attorney made throughout the whistleblower process — not just the statements in the original tip. This underscores that even a lawyer who believes that he or she may qualify for a whistleblower award should consult their own counsel to ensure, among other things, that they are properly documenting their intentions.

Jarkesy, SEC Dispute Next Steps After Supreme Court’s Ruling

Former hedge fund manager George Jarkesy told the Fifth Circuit it shouldn’t send an enforcement case against him back to the SEC now that the US Supreme Court has ruled he’s entitled to a jury trial.

The Securities and Exchange Commission, meanwhile, said the case should go directly back to it. The parties’ dueling letters were filed with the US Court of Appeals for the Fifth Circuit on Tuesday.

An administrative law judge found Jarkesy had committed securities fraud, and the SEC eventually ordered him to pay almost $1 million….

As Shareholder Litigation Rises, Non-US Companies Must Take Heed

The proliferation of securities suits in the US creates an effective tax on doing business here, as companies face the constant threat of shareholder litigation that creates enormous financial risk for a business and its insurers.

While this type of litigation has mostly been considered an American phenomenon, there is reason for companies in other jurisdictions to take heed of its potential spread.

In Europe, securities plaintiffs have secured 10-figure settlements, including 1.43 billion euros ($1.58 billion) that was recovered for shareholders in the Germany and South Africa-listed Steinhoff International following allegations of massive accounting fraud, and 1.3 billion euros from Benelux-based Fortis N.V. following allegations that it misled investors about its solvency status.

SEC (Still) Conducting Whistleblower Impediment Sweeps

Yesterday, the SEC announced it had charged seven companies with violating ’34 Act Rule 21F-17(a) by using employment and separation agreements to impede potential whistleblowers from reporting misconduct to the SEC.

Here are four bullets about this sweep – and the “bottom line” about what you need to do now:

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4. A new wrinkle? – Cooley partner Brad Goldberg notes that what’s different about this new sweep is that all of these companies required employees to waive their right to possible whistleblower monetary awards – so they may not have directly impeded the actual reporting, but they were arguably indirectly impeding by having them waive the right to the award.

Bottom Line: If you haven’t battle-tested your employment and separation agreements against the SEC’s line of impediment cases yet, it’s a good reminder to do so.