SEC Brings Settled Cybersecurity Controls Case Against R.R. Donnelley & Sons Co.

SEC Charges R.R. Donnelley & Sons Co. with Cybersecurity-Related Controls Violations

The Securities and Exchange Commission today announced that R.R. Donnelley & Sons Company (RRD), a global provider of business communication and marketing services, agreed to pay over $2.1 million to settle disclosure and internal control failure charges relating to cybersecurity incidents and alerts in late 2021.

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According to the SEC’s order, data integrity and confidentiality were critically important to RRD’s business. Because client data was stored on RRD’s network, its information security personnel and the third-party service provider RRD hired were responsible for monitoring the network’s security. However, according to the order, RRD failed to design effective disclosure controls and procedures to report relevant cybersecurity information to management with the responsibility for making disclosure decisions, and failed to carefully assess and respond to alerts of unusual activity in a timely manner. The order further finds that RRD failed to devise and maintain a system of cybersecurity-related internal accounting controls sufficient to provide reasonable assurances that access to RRD’s assets – its information technology systems and networks – was permitted only with management’s authorization.

SEC Ends Probe Into Consensys, Won’t Sue Over Ethereum 2.0

The price of ether (ETH) rose after Consensys received letters from the U.S. Securities and Exchange Commission (SEC) saying the regulator had ended its investigation into the technology incubator company and was not going to recommend an enforcement action against it.

The SEC told Consensys, whose products include the MetaMask wallet, it was not bringing any enforcement actions in a pair of letters sent to its law firms on Tuesday. In a blog post, Consensys said the SEC was “closing its investigation into Ethereum 2.0.”

The letters had the subject line “Re: In the Matter of Ethereum 2.0 (C-08950),” but did not otherwise explicitly mention the blockchain associated with the second-largest cryptocurrency by market capitalization.

In Nvidia and Meta cases, Supreme Court will review shareholder class action dismissal rules

In the Nvidia case, the Supreme Court will decide whether shareholders can establish a company’s fraudulent intent by pointing to internal documents they have not actually seen and whether investors can rely on their own hired experts to prove the company’s representations were false. The 1995 federal law governing shareholder class actions, the Private Securities Litigation Reform Act, requires plaintiffs to show both fraudulent intent, or scienter, and falsity in order to survive defense motions to dismiss their cases.

According to Nvidia’s Supreme Court counsel from Hogan Lovells, only the 1st and 9th Circuits allow plaintiffs to “speculate” about the content of internal corporate documents in order to establish a defendant’s intent to deceive investors. And only the 9th Circuit, they said, permits shareholders to use their own hired expert, “rather than particularized facts,” to show the company fed false information to investors.

Scams Keep Haunting Crypto Market, Aided by AI and Social Media

When Jakob-Moritz Eberl clicked on a link to the website of a crypto company, he was stunned at what he saw: his own face looking back at him.

Eberl’s headshot was displayed under the name “Mason Jones” and the title “Senior Blockchain Engineer” as one of six men the site claimed were on the team behind InfinityStakeChain. A near-duplicate website for a platform called FlexyStakes used the same photos above different names, identifying Eberl as “Noel Brennan.” Eberl, a social scientist at the University of Vienna who doesn’t even own any crypto, had no idea why his picture was on the sites.

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It’s not just fake headshots and misleading websites: Apparent fraudsters have attempted to feign legitimacy with false press releases about venture-capital fundraises and bogus claims about partnerships with industry giants. In some cases, the false information has leaked into trusted industry data sources.