SEC Charges 16 Firms for Recordkeeping Failures Related to Off-Channel Communications

Sixteen Firms to Pay More Than $81 Million Combined to Settle Charges for Widespread Recordkeeping Failures

The Securities and Exchange Commission today announced charges against five broker-dealers, seven dually registered broker-dealers and investment advisers, and four affiliated investment advisers for widespread and longstanding failures by the firms and their employees to maintain and preserve electronic communications.

The firms admitted the facts set forth in their respective SEC orders, acknowledged that their conduct violated recordkeeping provisions of the federal securities laws, agreed to pay combined civil penalties of more than $81 million, as outlined below, and have begun implementing improvements to their compliance policies and procedures to address these violations.

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The SEC’s investigations uncovered pervasive and longstanding uses of unapproved communication methods, known as off-channel communications, at all 16 firms….

US judge orders Elon Musk to testify in SEC’s Twitter probe

A federal judge ordered Elon Musk to testify again in the U.S. Securities and Exchange Commission’s probe of his $44 billion takeover of Twitter, giving the regulator and the billionaire a week to agree on a date and location for the interview.

U.S. Magistrate Judge Laurel Beeler’s order, issued on Saturday night, formalized a tentative ruling she made in December that sided with the regulator.

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Musk fought the SEC’s bid to interview him, saying it had already done so twice, and accused the regulator of harassment.

As Sam Bankman-Fried awaits jail, FTX customers await full repayment

As Sam Bankman-Fried prepares to face sentencing next month for his criminal fraud conviction tied to the epic collapse of FTX in 2022, former customers of the crypto exchange have reasons to believe they could actually recoup their money.

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Lawyers representing the bankruptcy estate of FTX told a judge in Delaware last week that they expect to fully repay customers and creditors with legitimate claims. Bankruptcy attorney Andrew Dietderich, who works with FTX’s new leadership team, said “there is still a great amount of work and risk” ahead in getting all the money back to clients, but that the team has a “strategy to achieve it.”

Elon Musk Isn’t the Only Billionaire Fighting Delaware

Three powerful shareholders are trying to loosen Delaware’s long-held grip over public companies.

Tripadvisor, under media executive Greg Maffei, wants to reincorporate in Nevada, over the objection of minority shareholders. Billionaire Barry Diller is awaiting a ruling that could relax Delaware’s scrutiny of transactions like the 2020 split of some of his online businesses. And Elon Musk, who reincorporated Twitter as X in Nevada last year, has said he would ask shareholders about reincorporating Tesla in Texas.

Crypto fraud suit tied to Winklevoss twins now $3B: NY AG

New York Attorney General Letitia James on Friday expanded her lawsuit against Digital Currency Group and other cryptocurrency defendants, tripling the size of their alleged fraud scheme to more than $3 billion.

James in October sued Digital Currency, its Genesis Global Capital unit, and Gemini Capital, the exchange run by twin brothers Cameron and Tyler Winklevoss.

She claimed they caused more than $1 billion of losses by misleading investors about the Gemini Earn program, which let customers lend crypto assets to Genesis in exchange for a high rate of return.

The attorney general said it had become clear as more investors came forward that “the scam perpetrated by DCG through Genesis” also ensnared investors who sent money directly to Genesis and were falsely assured their money was safe.