SEC Charges Former Examiner at Federal Reserve with Illegal Trading, False Certifications

Ex-Fed Examiner’s Capital One, NYCB Trading Draws SEC Suit

A former examiner and senior banking supervisor at the Federal Reserve Bank of Richmond illegally traded using nonpublic information about Capital One Financial Corp. and New York Community Bancorp Inc., the Securities and Exchange Commission said.

Robert Brian Thompson’s personal brokerage trading activity allegedly violated prohibitions on trading in bank securities, given the conflicts of interest his supervisory and regulatory responsibilities presented, according to the SEC’s complaint filed Nov. 8 in the US District Court for the Eastern District of Virginia. Thompson also attempted to evade scrutiny by submitting false conflict-of-interest certifications to the Fed, the SEC said.

Social Media Squabble Over Restaurant Portions Begets Securities Suit

It is now well-recognized, as Bloomberg columnist Matt Levine has famously said, that “Everything Everywhere is securities fraud.” Just the same, it does come as a surprise sometimes to see the things that make their way into securities class action lawsuit complaints. In the latest example of this phenomenon at work, a plaintiff shareholder has filed a securities class action lawsuit against the restaurant company Chipotle Mexican Grill, as a result of a social media campaign raising questions about the chain’s meal portions. To combat the social media chatter, the company concentrated on providing generous portions, which cut into the company’s margins – and drew a securities lawsuit. A copy of the November 11, 2024, complaint in the suit can be found here.

Trump Promised Clear Crypto Regulations, but the SEC Might Not Be Prepared to Give Them

SEC commissioner Hester Peirce said she is concerned that the agency is not prepared for a presidential administration that is more hospitable to crypto in an interview on the Block and Order podcast published last week but recorded six days before the election. The subsequent victory by Donald Trump, who has promised clearer crypto regulation under his presidency, added urgency to Peirce’s concerns.

Responding to a question about what she expects under a presidential administration friendlier to crypto in 2025, Pierce said, “What I worry is going to happen is [we will] get a more open mind toward developing good rules, and then [when] they say ‘okay, so what should those rules be?’ no one knows what to do.”

SEC Urges Companies to Disclose AI Impact in Year-End Filings

SEC officials will be watching closely to see what details US companies provide investors about their ongoing reliance on artificial intelligence or how they are developing the fast-emerging technology.

AI isn’t explicitly mentioned in Securities and Exchange Commission rules, yet could still trigger corporate disclosures throughout the financial report from the description of the business, to its risks, to management’s discussion and analysis, said Sarah Lowe, deputy chief accountant with the SEC’s Division of Corporation Finance.