SEC Charges Firm, Founder with Scheme to Manipulate Getty Images Stock Via Phony Buyout

SEC Charges Robert Scott Murray and Trillium Capital with Fraudulent Scheme to Manipulate Getty Images Stock

The Securities and Exchange Commission today charged Robert Scott Murray and Trillium Capital LLC, a private company controlled by Murray, with a fraudulent scheme to manipulate the stock price of Getty Images Holdings Inc. by announcing a phony offer by Trillium to purchase Getty Images. Murray, of Mashpee, Mass., is a former CEO and CFO of several publicly traded companies.

The SEC’s complaint, filed in U.S. District Court for the District of Massachusetts, alleges that, in early April 2023, after building a position in Getty Images stock and options, Murray and Trillium began issuing press releases calling upon Getty Images to sell itself or to add Murray to its board of directors. The complaint alleges that Murray designed these press releases, in part, to increase Getty Images stock price, but the releases failed to have much effect on Getty Images stock. Murray thus allegedly devised what he called his “new plan” to pump up the price of Getty Images stock by announcing a phony buyout offer. On the morning of April 24, 2023, Murray and Trillium Capital issued a press release announcing Trillium’s supposed proposal to buy all outstanding stock of Getty Images for $10 a share, nearly twice the prior trading day’s closing price. The supposed offer caused the company’s stock price to spike. The SEC’s complaint alleges that the buyout announcement was false and misleading because Murray and Trillium had no real intention of acquiring Getty, nor did they make a genuine effort to fund the proposed transaction. Although Murray and Trillium pledged in the press release that they would hold their shares, Murray started to liquidate his Getty Images stock within minutes after the market opened on April 24, without even waiting for Getty to respond to his announced offer.

Binance ex-CEO Changpeng Zhao begins prison sentence in California

Binance’s billionaire founder Changpeng Zhao has reported to a low-security federal prison in Lompoc, California, according to the Bureau of Prisons website.

Zhao was sentenced to four months in prison in April after pleading guilty to charges of enabling money laundering at his crypto exchange.

The sentence handed down to the former Binance chief was significantly less than the three years that federal prosecutors had been seeking for him. The defense had asked for five months of probation. The sentencing guidelines called for a prison term of 12 to 18 months.

When asked for confirmation of his prison location, Zhao’s defense team at Latham and Watkins pointed to the Bureau of Prisons website.

Top adviser recommends against Elon Musk’s $56B Tesla pay package

Top proxy adviser Institutional Shareholder Services on Friday recommended Tesla shareholders vote against the reapproval of CEO Elon Musk’s $56 billion pay package and withhold their support from the re-election of News Corp. scion James Murdoch to the automaker’s board.

Tesla’s shareholder meeting is on June 13.

It’s time Elon Musk faced a blunt truth about Tesla

Tesla’s shareholders will be offered a free tour of a Tesla factory, perhaps a blue tick on X, the site formerly known as Twitter, or even a trip in one of his space rockets.

Elon Musk is doing everything he can to win shareholders’ backing for his bumper $56bn (£44bn) pay package for running the electric car manufacturer ahead of a crucial vote on the issue in less than two weeks from now.

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With the blunt language that is so often characteristic of the Musk team, Robyn Denholm, Tesla’s chairman, has dismissed criticism of the package as “crap” and “total BS”, while Musk himself has started dropping heavy hints that he would rather go off and concentrate on his other businesses if he doesn’t get the rewards he feels he is entitled to for running Tesla.

Legal Threats to Wall Street’s Self-Regulators May Upend Markets

Looming circuit court rulings on the constitutionality of FINRA and other Wall Street self-regulatory groups have attorneys and law professors concerned about a potential shock to the American securities trading system if the bodies that police the market are rendered powerless.

The clashes over those self-regulatory organizations, some little known outside the financial industry, are playing out in the shadow of US Supreme Court cases over the power of government agencies. A ruling is expected soon in one of the agency cases, SEC v. Jarkesy, on the Securities and Exchange Commission’s use of in-house judges, known as administrative law judges.

Flood of Cash from Coinbase Gives Crypto One of the Biggest U.S. Election War Chests

U.S. digital assets exchange Coinbase (COIN) announced that it was following in the footsteps of its two major campaign-finance partners, Ripple and Andreessen Horowitz (a16z), in throwing another $25 million each into the pot that has taken in about $161 million to spend on the 2024 U.S. elections. The other two companies announced their new commitments last week.

The money is specifically bolstering the coffers of the industry’s Fairshake political action committee (PAC) and its affiliate PACs, which have been combing through state primaries to find congressional candidates who’ve left their political platforms open to pro-crypto positions. The committees have flooded some little-known politicians with millions in off-book support. So-called super PACs like these typically buy ads for or against candidates, but they aren’t allowed to have any official connections with the candidates’ campaigns.

SEC Staff Clarifies Form 8-K Reporting Requirements for Cyber Incidents

Public companies should carefully consider the specific item of Form 8-K under which they disclose cybersecurity incidents. Since Item 1.05 was added, many companies have erred on the side of providing early disclosure under Item 1.05 even before the company has determined that an incident is material. Gerding acknowledges that early, voluntary disclosures have value to investors and the marketplace. But his statement is a reminder that such early disclosures are not the end of the analysis. Even if a company made an early disclosure, once it determines that an incident is material the company is required to disclose the material impact of the incident in a subsequent filing that satisfies all of the requirements of Item 1.05.

U.S. President Biden Vetoes Resolution Overturning SEC Guidance

U.S President Joe Biden signed a veto of a House Joint Resolution that would have repealed the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121, he announced Friday afternoon.

SAB 121 is a controversial piece of SEC accounting guidance that directs financial institutions holding crypto for customers to keep the assets on their own balance sheets. Critics of the guidance say it makes it too difficult for financial institutions to work with crypto companies.

In his statement announcing the veto, Biden said he would not support any “measures that jeopardize the well-being of consumers and investors.”