SEC Charges Former CEO, Consultant with False Statements Regarding PPE Purchases During COVID

SEC Files Settled Action as to Former CEO and Consultant to Company for Allegedly Issuing False COVID-era Press Release

On February 23, 2026, the Securities and Exchange Commission filed a settled action as to Christopher B. Ferguson, former CEO of Edison Nation, Inc., and Brian P. McFadden, a consultant to Edison Nation, in connection with allegations that Edison Nation disseminated a false and misleading press release and attached it to a Form 8-K it filed with the Commission.

The SEC’s complaint alleges that, before the markets opened on April 16, 2020, Edison Nation, at the direction of Ferguson and McFadden, issued a press release announcing that “Edison Nation Medical Secures Over $10 Million in Purchase Orders for Personal Protective Equipment in First Week Since Launch,” when, in reality, it had only approximately $2.5 million in purchase orders at the time of the press release. As alleged, Ferguson, of Fishers, Indiana, and McFadden, of Safety Harbor, Florida, had been negotiating with a distribution company for the purchase of $9 million worth of hand sanitizer, but, two days before Edison Nation issued the press release, the distribution company informed them that it was unable to proceed with the transaction. The complaint further alleges that Edison Nation’s share price increased from $1.67 as of the prior trading day’s closing to $4.96 by market open on April 16, 2020 after the issuance of the press release—an increase of 197%—and after the announcement McFadden sold 33,290 shares of Edison Nation stock and obtained illicit profits of approximately $75,208.

AI Disruption Shadow Trading

“Shares of cybersecurity software companies tumbled Friday after Anthropic PBC introduced a new security feature into its Claude AI model.” […]

I wrote about this as a potential business model for the AI labs: Short the industry you are about to disrupt, release your disruptive tool, and make a quick profit. There are arguably some problems with that model, though it does feel like the sort of thing an evil AI might come up with.

A reader emailed another, closely related idea, though: “If I worked at Anthropic and I ‘suspected’ this would happen and so I bought short-dated puts before the announcement, would that be insider trading or just gambling?” I think the answer is that it would be what we sometimes call “shadow trading,” using inside information about one company (here, Anthropic) to make profitable trades on other (negatively) correlated companies. Shadow trading is, uh, probably illegal, though there are fewer cases than there are about traditional insider trading, and this is not legal advice. I suppose if everyone at the AI labs started buying puts on the industries they disrupted, the US Securities and Exchange Commission might start to take notice, though with the current SEC I’m not sure that’s true.

Kalshi Clears ‘Backlog’ of Suspicious Activity, Plans to Disclose Actions Against Insider Trading

When Robert DeNault joined Kalshi’s four-person legal team in October, it was under the assumption that his background investigating white collar crimes could come in handy.

Now serving as the prediction market’s head of enforcement, the former associate at law firm White & Case told Decrypt that Kalshi is preparing to disclose a wave of disciplinary actions that have been taken against users—the result of a monthslong effort to clean up a “backlog” of potential trading violations.

“It’s taken a big chunk of my first few months here to get through these,” he said. “We’re going to continue to post these, […] but you’ll see it start in the coming weeks.”

Jane Street Accused of Insider Trading That Helped Collapse Terraform

The administrator winding down Do Kwon’s Terraform Labs has sued Jane Street, alleging that the high-speed trading giant engaged in insider trading to profit unlawfully from and ultimately hasten the crypto empire’s collapse.

Todd Snyder, the plan administrator appointed by a bankruptcy court, is seeking damages from Jane Street, its co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang.

In a heavily-redacted complaint, the administrator alleged Monday in Manhattan’s federal court that Jane Street used material nonpublic information from Terraform insiders to front-run trading that sped up Terraform’s demise.

Financial Crime’s Forgotten Statute: SDNY Rediscovers a Powerful Tool

Whatever surge of activity that followed Section 225’s enactment has petered out. We have found no Section 225 cases charged in any district court within the Second Circuit in the last decade, until this year. But two notable exceptions have occurred in recent months: the First Brands indictment, and an indictment a few weeks before it, in United States v. Chu and Goodgame. The Chu indictment alleges that two executives at a company defrauded lenders through double-pledging collateral and other schemes. Like the First Brands indictment, Chu was also brought by the Securities and Commodities Fraud Unit of the SDNY.

SDNY’s use of Section 225 in the First Brands case was not an aberration or an exception rediscovered for only the largest of frauds. Rather, these two indictments signal the return of Section 225. This Administration’s charging policy requires prosecutors to charge the most serious, readily provable offense. Section 225 will often be the most serious offense available in major fraud cases, and SDNY—and other components of DOJ—can be expected to charge it when it is readily provable. When that happens, Section 225 will change the calculus for lawyers and white-collar defendants alike.