SEC Approves Ether ETFs

Ether Cryptocurrency ETFs Are Approved by the SEC

Federal regulators on Thursday approved an investment product tied to the cryptocurrency Ether, the most valuable digital asset after Bitcoin, in a major boost for the crypto industry.

The Securities and Exchange Commission said a group of exchanges could begin listing investment products known as exchange-traded funds, or E.T.F.s, linked to the price of Ether. The products would offer an easier and simpler way for people to invest in crypto, potentially boosting prices and promoting wider adoption of digital currencies.

FTX bankruptcy lawyers were not complicit in fraud, report finds

FTX’s bankruptcy lawyers at Sullivan & Cromwell were not complicit in the fraud that caused the crypto company to collapse, a court-appointed examiner concluded on Thursday.

Former FTX CEO Sam Bankman-Fried was convicted in November of stealing $8 billion from FTX customers. FTX creditors and investors had accused the company’s lawyers at Sullivan & Cromwell of failing to stop the fraud while positioning themselves for a lucrative position as the company’s primary bankruptcy counsel.

Insider trading: BP exec’s husband gets prison for stock purchases

The ex-husband of a former BP mergers and acquisitions manager was sentenced to two years in federal prison for insider trading that netted him $1.76 million after he eavesdropped on her work calls about the oil giant buying another company.

The ex-husband, Tyler Loudon, also was sentenced to one year of supervised release after his prison term and fined $10,000 by U.S. District Court Judge Sim Lake in Houston on Monday.

SEC Charges Former Fund Manager with Defrauding Two SPACs and a Private Issuer

The Securities and Exchange Commission today announced that Ganesh H. Betanabhatla, who previously managed private equity funds through his now-defunct Houston-based firm, Ramas Capital Management, LLC, has agreed to settle charges that he defrauded three issuers by committing to purchase $263.5 million of their securities on behalf of investment funds he managed when he and the funds did not have the money to invest.

According to the SEC’s complaint, filed in the United Stated District Court for the District of Nebraska, Betanabhatla hid the fact that the funds he claimed to manage had no money to invest by falsifying key documents and emails that he provided to the issuers, and lying to one issuer about having $500 million to invest. The SEC alleges that none of the $263.5 million in commitments that Betanabhatla made was funded, leaving the issuers to fill the gap in capital they thought they had secured. As alleged, two of the issuers that Betanabhatla defrauded were special purpose acquisition companies, or SPACs, and the third was a private company.

How Will the Jarkesy Decision Affect the SEC?

While a ruling against the SEC would be an embarrassment for an agency that has dismissed claims like Jarkesy’s as fringe and legally unsupportable, the sort of outsized effects on the SEC that some have predicted are unlikely to occur. A ruling against the SEC would have some short-term effects, as the SEC rethinks its processes and fends off challenges to its pending and historical administrative actions.

But as discussed further below, even with the loss or narrowing of the administrative enforcement option, the SEC can continue to accomplish its goals through civil enforcement in federal court. The agency’s enforcement program already relies heavily on federal court litigation (and settled actions achieved through the threat of such litigation), and the agency can readily shift most administrative actions to the federal court forum. Perhaps that ostensibly more neutral forum will be less receptive to SEC positions than SEC administrative courts; only time will tell.

However, a balanced analysis will recognize that the enforcement approach of the current SEC leadership does not rely on a single procedural mechanism, and the agency likely will continue to use its enforcement powers aggressively and push for ever high penalties….

Wall Street’s Five-Day Office Rules Aren’t Our Fault, Finra Says

As Wall Street bosses warn employees that regulatory changes are about to end their days of working from home, the watchdog in charge has a blunt message: Stop blaming us.

“There is no rule requiring registered persons to work from an office five days a week,” said Kayte Toczylowski, head of member relations and education at the Financial Industry Regulatory Authority.