SEC Chair Gensler Details Unauthorized Access to Twitter Account, Coordination with FBI and DHS

Statement on Unauthorized Access to the SEC’s @SECGov X.com Account by SEC Chair Gary Gensler

Based on current information, staff understands that, shortly after 4:00 pm ET on Tuesday, January 9, 2024, an unauthorized party gained access to the @SECGov X.com account by obtaining control over the phone number associated with the account. The unauthorized party made one post at 4:11 pm ET purporting to announce the Commission’s approval of spot bitcoin exchange-traded funds, as well as a second post approximately two minutes later that said “$BTC.” The unauthorized party subsequently deleted the second post, but not the first. Using the @SECGov account, the unauthorized party also liked two posts by non-SEC accounts. While SEC staff is still assessing the scope of the incident, there is currently no evidence that the unauthorized party gained access to SEC systems, data, devices, or other social media accounts.

Upon becoming aware of the incident, staff in the Office of Public Affairs posted to the official @garygensler X.com account at 4:26 pm ET, alerting the public that the @SECGov account had been compromised, an unauthorized post was made, and the Commission had not approved the listing and trading of spot bitcoin exchange-traded products. Staff deleted the first unauthorized post on the @SECGov account, un-liked the two liked posts, and, at 4:42 pm ET, made a new post on the @SECGov account stating that the account had been compromised. Staff also reached out to X.com for assistance in terminating the unauthorized access to the @SECGov account. Based on information currently available, staff believe that the unauthorized access to the account was terminated between 4:40 pm ET and 5:30 pm ET.

Crypto Firm Genesis Global Trading to Pay $8 Million for Compliance Failings

Crypto brokerage firm Genesis Global Trading has agreed to pay $8 million in a settlement with New York state’s financial regulator over alleged failings in its anti-money-laundering and cybersecurity programs.

Genesis Global Trading, part of the now-bankrupt Genesis Global Holdco LLC, closed its U.S. spot crypto trading operations in September and is in the process of winding down. As part of its settlement with the New York State Department of Financial Services, the trading unit will surrender its BitLicense, which allowed it to operate a crypto business in New York, the regulator said in a statement Friday.

Morgan Stanley Banker Was ‘Daddy’ to Hedge Fund He Tipped

For years, hedge funds knew that one man at Morgan Stanley could make them millions.

A big block of shares would come up for sale, and block-trading head Pawan Passi would tip off the funds. One even told Passi he had put that investor “in the game” (adding a colorful modifier) and that the investor “would be at the kiddie table” if not for him.

“I know who my daddy is,” the investor said in a call, according to federal prosecutors.

A New COVID-Related Securities Suit for the New Year

One of the most distinct securities class action lawsuit filing phenomena since the outbreak of COVID-19 in the U.S. in March 2020 has been the surge of pandemic-related securities suits, particularly during the period 2020 through 2022. This securities suit filing trend even continued into 2023, although the incidence of COVID-related suits dwindled during the year. However, in an unexpected development, a plaintiff shareholder has now filed yet another COVID-related securities suit against BioNTech, the German biotechnology company that, along with its partner Pfizer, was lionized for helping to develop a COVID-19 vaccine. The company was hit with a securities suit after its share price declined following a sizeable inventory write-off. A copy of the January 12, 2024, complaint against the company can be found here.