SEC Brings Settled Fraud Charges Against Digital World SPAC

SEC Charges Digital World SPAC for Material Misrepresentations to Investors

The Securities and Exchange Commission today announced settled fraud charges against Digital World Acquisition Corporation (DWAC), a special purpose acquisition company (SPAC), for making material misrepresentations in forms filed with the SEC as part of DWAC’s initial public offering and proposed merger with Trump Media & Technology Group Corp. (TMTG). The Commission finds that DWAC misled investors and the SEC by failing to disclose that it had formulated a plan to acquire and was pursuing the acquisition of TMTG prior to DWAC’s IPO.

The purpose of a SPAC is to identify and acquire an operating business. As such, steps taken by a SPAC in furtherance of a particular acquisition are important to investors. According to the SEC’s order, DWAC filed an amended Form S-1 in support of its IPO in early September 2021 that stated that neither DWAC nor its officers and directors had had any discussions with any potential target companies prior to the IPO. But, as found in the SEC’s order, dating back to February 2021, an individual who would later become DWAC’s CEO and Board Chairman, and others involved with DWAC, had extensive SPAC merger discussions with TMTG. The SEC’s order further finds that, while DWAC’s CEO and Chairman initially pursued these discussions with TMTG on behalf of another SPAC, he created a plan in the spring and summer of 2021 to potentially use DWAC to pursue a merger with TMTG and used this plan to solicit certain pre-IPO investors. The order also finds that DWAC failed to disclose that the CEO had a potential conflict of interest based on an agreement he had signed with TMTG. As a result, DWAC’s amended Form S-1 was materially false and misleading.

U.S. House Republicans Introduce Crypto Oversight Bill to Protect Investors

U.S. House Republicans introduced a new digital assets oversight bill on Thursday that aims to establish a regulatory framework to protect investors in the crypto sector.

“Today’s introduction of the Financial Innovation and Technology for the 21st Century Act marks a significant milestone in the House Committees on Agriculture and Financial Services efforts to establish a much-needed regulatory framework that protects consumers and investors and fosters American leadership in the digital asset space,” said Chairman of the House Committee on Agriculture Rep. Glenn “GT” Thompson (R-Pa.) in a statement.

FTX sues Bankman-Fried, others to recoup more than $1 billion

FTX Trading on Thursday sued founder Sam Bankman-Fried and other former executives of the cryptocurrency exchange, seeking to recoup more than $1 billion they allegedly misappropriated before FTX went bankrupt.

The complaint filed in Delaware bankruptcy court also names as defendants Caroline Ellison, who led Bankman-Fried’s Alameda Research hedge fund; former FTX technology chief Zixiao “Gary” Wang; and former FTX engineering director Nishad Singh.

FTX said the defendants continually misappropriated funds to finance luxury condominiums, political contributions, speculative investments and other “pet projects,” while committing “one of the largest financial frauds in history.”

FTX lawyers accuse Sam Bankman-Fried of financing his criminal defense with $10 million in misappropriated funds

The lawyers are seeking to recover funds from Bankman-Fried and former executives of FTX and sister hedge fund Alameda Research. One way the attorneys for the bankrupt exchange say Bankman-Fried pilfered money was through a $10 million gift to his father, distinguished legal scholar Joe Bankman.

Much of that $10 million gift was routed from FTX to Bankman-Fried’s Morgan Stanley and TD Ameritrade accounts around January 2022, the lawsuit alleges. The complaint claims those proceeds are now paying for Bankman-Fried’s criminal defense bills.

The Rise and Fall of the Chief Diversity Officer

Two years ago chief diversity officers were some of the hottest hires into executive ranks. Now, they increasingly feel left out in the cold.

Companies including Netflix, Disney and Warner Bros. Discovery have recently said that high-profile diversity, equity and inclusion executives will be leaving their jobs. Thousands of diversity-focused workers have been laid off since last year, and some companies are scaling back racial justice commitments.

Diversity, equity and inclusion—or DEI—jobs were put in the crosshairs after many companies started re-examining their executive ranks during the tech sector’s shake out last fall. Some chief diversity officers say their work is facing additional scrutiny since the Supreme Court struck down affirmative action in college admissions and companies brace for potential legal challenges. DEI work has also become a political target.

SBF and FTX Get Spoofed in Animated Comedy Starring T.J. Miller

If you ever thought the FTX saga seemed destined for a television adaptation, the entertainment industry agrees with you. Last year’s collapse of the rotten-to-the-core crypto exchange is the inspiration for an upcoming animated comedy called “FORTUN3.”

The series, created by upstart Web3 studio Toonstar, is a send-up of the crypto-bro culture that FTX thrived in, complete with a protagonist partially based on its former CEO, Sam Bankman-Fried, or SBF.

North Korean hackers breached a US tech company to steal crypto

A North Korean government-backed hacking group penetrated an American IT management company and used it as a springboard to target cryptocurrency companies, the firm and cybersecurity experts said on Thursday.

The hackers broke into Louisville, Colorado-based JumpCloud in late June and used their access to the company’s systems to target “fewer than 5” of its clients, it said in a blog post.