SDNY Hits FTX's Bankman-Fried With New Charges in Superseding Indictment

Sam Bankman-Fried hit with fresh indictment, more charges | Fox BusinessSam Bankman-Fried is facing more federal charges after the U.S. Attorney’s Office for the Southern District of New York filed a superseding indictment unsealed Thursday that could mean decades more prison time for the FTX founder if he is found guilty.

The new indictment — which is the third from the SDNY and replaces the prior two — adds four more counts to the eight charges Bankman-Fried was already facing in connection with the collapse of his cryptocurrency exchange. It also adds another potential forty years in prison on top of the 115 years the disgraced crypto titan was already looking at if convicted.

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The additional charges include one count of conspiracy to operate an unlicensed money transmitting business, and one count of conspiracy to make unlawful political contributions and defraud the Securities and Exchange Commission (SEC).

SEC Charges Ozy Media and its CEO Carlos Watson with Widespread Scheme to Defraud Investors

The Securities and Exchange Commission today charged media and entertainment company Ozy Media Inc., its CEO Carlos R. Watson, Jr., its former COO Samir Rao, and its former Chief of Staff Suzee Han with defrauding investors of approximately $50 million through repeated misrepresentations concerning the company’s basic financial condition, business relationships, and fundraising efforts. Rao and Han have agreed to resolve the charges against them.

According to the SEC’s complaint, from at least January 2019 through September 2021, the defendants routinely and purposely presented prospective investors with false financial information that grossly inflated Ozy Media’s annual revenue by at least 100 percent. Watson and Rao also allegedly solicited investments by repeatedly and falsely telling prospective investors that well-known and sophisticated investors would be investing in Ozy Media in some capacity.

The SEC’s complaint further alleges that Watson and Rao orchestrated a scheme in which Rao impersonated an executive from YouTube in an effort to support Ozy Media’s false claims to a prospective investor at the time that the company was receiving licensing revenue from YouTube when it was not.

Gensler Is Getting SEC Staff Back to The Office — But Not That Often

Many Wall Street workers have been back in the office for at least a year. Now, the industry’s main regulator is (finally) following suit. The SEC’s rank and file workers are due back on March 27. But don’t expect a full house at the Washington headquarters, or any of the agency’s 11 regional offices either….

Elon Musk Trial Win a ‘Non Sequitur’ in Twitter Sitter Case, SEC Says

Musk’s lawyer argued to the appeals court that the San Francisco verdict confirms that Musk’s tweets didn’t violate securities laws. Investors had sued Musk over the “funding secured” tweet, claiming he defrauded them. A federal jury took just two hours to clear him, sending shares of the electric car maker surging.

That verdict is irrelevant, the SEC said in response Thursday. Musk forfeited his chance to test the SEC’s claims at trial when he twice voluntarily agreed to settle, according to the filing.

“Even if the verdict were somehow relevant, Musk reads too much into it,” the SEC said. The settlement “was not conditioned upon the outcome of the private litigation,” lawyers for the agency added. “The Commission had no role in that case.”

SEC Charges Cousins for Insider Trading in Kodak Stock Ahead of Company’s Planned Govt. Partnership to Assist in Response to COVID-19The Securities and Exchange Commission today charged Andrew Stiles for insider trading in the stocks of Eastman Kodak Company and Novavax, Inc. based on nonpublic information related to both companies’ planned government partnerships to assist in the fight against COVID-19 at the height of the pandemic. The SEC also charged Andrew Stiles’ cousin, Gray Stiles, of Richmond, Virginia, for insider trading in Kodak stock that netted the two more than $1.5 million in illegal profits.

The SEC’s complaint alleges that Andrew Stiles, of Charleston, South Carolina, through his employment at a medicine supply chain company, learned about Kodak’s efforts to obtain a $765 million loan from the federal government to manufacture chemicals to strengthen the domestic supply chain for a number of pharmaceuticals as part of the response to the COVID-19 pandemic. Based on this material nonpublic information, Andrew Stiles allegedly purchased more than 95,000 shares of Kodak stock ahead of the public announcement in July 2020 and tipped his cousin, Gray Stiles, who purchased more than 45,000 shares. After the announcement, Andrew Stiles and Gray Stiles sold their Kodak shares for more than $1.5 million in total profits….

Slam Dunks Might Be Securities

This is not a definitive ruling that these NFTs are securities — it is just a preliminary stage of the case — and it is certainly not a ruling that all NFTs are securities; the control that Dapper has over the investment here seems important. Also this is a case brought by private plaintiffs who bought Top Shot Moments during the bubble, not the SEC; the SEC tends to think that everything is a security, but has not really gone around claiming that NFTs are securities.

But the main fact of crypto regulation in the US in 2023 is that the SEC is cracking down by saying that everything is a security, and some crypto businesses are pushing back, arguing in court that in fact not everything in crypto is a security. My assumption is that, especially after the crypto collapse last year, courts are going to be very sympathetic to the SEC’s arguments, and very inclined to believe that everything is a security. This decision is another sign of that.

SEC Insider Trading Trial Loss Over Gartner Deal Overturned

The SEC convinced an appeals court that jurors should’ve had a chance to decide whether a Virginia mortgage broker traded on inside information regarding a Gartner acquisition, unwinding a rare agency loss in an insider trading case.

Based on evidence the Securities and Exchange Commission presented during a 2021 trial, jurors could have reasonably concluded that Christopher Clark traded on inside tips from his brother-in-law, the US Court of Appeals for the Fourth Circuit said Thursday.

A lower court judge dismissed charges against Clark before the case was sent to the jury….