The SEC Case that Could Become the "Blueprint for How to Do Insider Trading Legally"

Shadow Trading

I mean, on the one hand, that’s true, but on the other hand, imagine if the court said “nah that just isn’t insider trading”? (I don’t think that’s likely, since the judge has declined to dismiss the case. The SEC might still lose at trial, but if it does, that will probably be an inscrutable jury verdict that doesn’t really define the law for future cases. But if the SEC wins at trial, Panuwat could appeal, and then an appeals court could still say “nah, not insider trading.”) Then every sophisticated corporate insider — also, sorry, every Money Stuff reader — would have a blueprint for how to do insider trading legally. You find out your company’s news and you go trade the most correlated stock.

7 Ways Companies’ Cyber-Related Governance Disclosures Will Evolve Post-SEC Rule Change

The increased frequency and severity of cyberattacks has resulted in increased pressure on companies at a global level to prepare for, mitigate against, and disclose the impacts of these attacks. This pressure may be most clearly illustrated by the SEC’s recently adopted rules around incident disclosure. Beyond the SEC, investors have also recognized the increased importance of portfolio companies successfully overseeing and managing cybersecurity risks.

Large investors and their stewardship teams, as well as proxy advisors, are rapidly evolving their expectations for Boards and management teams to demonstrate robust cybersecurity programs are in place….

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Here are seven ways cyber disclosures of publicly traded companies should evolve to meet investor expectations….

‘Audits matter.’ AmTrust shareholders get US SEC backing in bid for appellate redo on BDO claim

The U.S. Securities and Exchange Commission told an appeals court last week that investors place significant faith in auditors’ certifications of corporate financials, calling on the court to reconsider the dismissal of securities fraud claims against auditor BDO USA by shareholders of the insurer AmTrust Financial Services.

The SEC laid out its views in an amicus brief that was requested by the 2nd U.S. Circuit Court of Appeals as the court weighs a shareholder petition to revive a class action claim against BDO for allegedly making false statements in the auditor’s 2013 certification of AmTrust’s financials.

FINRA’s Disciplinary Hearings Disappearing Act

FINRA’s Office of Hearing Officers (“OHO”) is currently staffed by a Chief Hearing Officer, Deputy Chief Hearing Officer, and six additional Hearing Officers, along with a group of Case Managers. The current hearing officers are, based on all appearances and my own experiences, highly qualified attorneys who are ready and willing to do their jobs.

Unfortunately, it is apparent that the disciplinary hearing business is drying up at FINRA. In 2023, FINRA’s OHO issued a pathetically few – three – disciplinary hearing decisions. That comes from only 20 formal disciplinary Complaints being issued by FINRA Enforcement in 2023, according to FINRA’s publicly available database.

The hearing decisions themselves were of appallingly little value. Also, typical of the decisions issued by OHO, all three have been appealed.

Appeals court to rehear Nasdaq diversity rule challenge

A federal appeals court agreed to rehear a challenge by two conservative groups to Nasdaq’s board diversity rule related to the disclosure of women and minority membership on boards of companies listed on the stock exchange.

The 5th Circuit U.S. Court of Appeals, in its order Monday night setting a rehearing, also vacated a decision in October upholding the Nasdaq rule by a three-judge panel from the appeals court, which encompasses Texas, Louisiana and Mississippi.

The Nasdaq rule requires companies to disclose details about the diversity of their boards of directors and to either have a minimum number of women and minorities on their boards or explain why they do not.

The 5th Circuit’s order Monday said it will reconsider the challenge to the Securities and Exchange Commission’s approval of the Nasdaq rule, with the full lineup of judges on that court rehearing the case in a so-called en banc proceeding.

Wall Street Litigation Firm Launches With Selendy Gay Recruits

David Elsberg, who last month announced he was leaving the litigation firm Selendy Gay Elsberg that he co-founded, has taken two of that operation’s partners with him to a new Wall Street boutique that launched on Wednesday.

Michael Duke and Vivek Tata are joining Elsberg at the new litigation firm, Elsberg Baker & Maruri. The firm will do plaintiff and defense work and expects to handle five trials and arbitrations this year, Elsberg said in an interview.

India regulator finds $240 million diverted out of Zee’s books, sources say

India’s market regulator has made a preliminary finding that 20 billion rupees ($240 million) has been diverted out of Zee Entertainment Enterprises’ books, and Zee Group founders have been called in for questioning, two sources with direct knowledge of the matter said.

The amount was 10 times higher than investigators had initially estimated, said one of the sources.

Zee’s shares tumbled 11% in Wednesday morning trade, adding to a steep share decline since its $10 billion merger with Sony Group was scrapped by the Japanese firm last month.