SEC Charges ICBC Financial Services with Recordkeeping Violations Following Cybersecurity Incident

Plus the Delaware Court of Chancery tells Elon Musk: "No $50 billion pay package for you."

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Melissa Hodgman, former Associate Director in the SEC’s Division of Enforcement, has joined Freshfields as a partner in the firm’s Washington, D.C. office.

Steven McCool, former AUSA for the District of Columbia, and Julia Coleman have joined McGuireWoods as partners in the firm’s Washington, D.C. office.

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SEC Settles Recordkeeping Charges with ICBC Financial Services in Connection with Cybersecurity Incident

The Securities and Exchange Commission today filed settled charges against Industrial and Commercial Bank of China Financial Services LLC (ICBC Financial Services) for deficient books and records. The SEC decided not to impose civil penalties against ICBC Financial Services because the company promptly undertook remedial measures and cooperated with the staff’s examination and investigation.

According to the SEC’s order, in November 2023, ICBC Financial Services was the victim of a ransomware attack. The SEC’s order finds that the attack led to a disruption in the firm’s access to, and ability to update, its books and records information in its various systems. The SEC’s order further finds that between November 8, 2023 and March 1, 2024, ICBC Financial Services failed to keep current its books and records, and to give or send written notifications for securities-related activity to its customers as required by the securities laws. According to the SEC’s order, the firm subsequently investigated the circumstances leading to the cybersecurity incident and determined that the root causes included its inadequate preparations for a potential cybersecurity incident.

by SEC Litigation Release

👉 The SEC Order is here.

Elon Musk’s $50 Billion Tesla Pay Can’t Be Reinstated, Delaware Judge Rules

A Delaware judge on Monday affirmed an earlier ruling that rescinded a giant pay package that Tesla had awarded its chief executive, Elon Musk.

The pay, in the form of stock options, was worth more than $50 billion and helped make Mr. Musk the richest person in the world. The package is now worth $100 billion after Tesla’s share price jumped sharply in recent weeks.

The judge, Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery, struck down the award in January, ruling that shareholders had not been properly informed of its details and that members of Tesla’s board were not sufficiently independent.

by NYT

Enron’s back!

Anyway somebody has acquired the Enron.com website, and the @Enron accounts on X and Instagram, and is using them to absolutely delightful effect. “We’re back. Can we talk?” says the X account, along with an inspiring video that features people saying “I am Enron” and then standing in a field in the shape of Enron’s famous “E” logo. The website is a mix of corporate gibberish (“The new Enron will surge ahead only if we stay committed to the principles that define us, especially when the path forward challenges us”) and a tremendous backronym explaining that “Enron” now stands for Energy, Nurture, Repentant, Opportunity and Nice. (Repentant!) There is some crypto nonsense. There is a countdown to something. “The information on the website is First Amendment protected parody,” says a disclaimer, “represents performance art, and is for entertainment purposes only,” but these days you’d say that even if you actually were launching a crypto token, or a meme stock, or for that matter an energy company.

by Matt Levine’s Money Stuff

👉 CNN reports: “It’s the comeback story no one asked for — the resurrection of a brand so toxic it remains synonymous with corporate fraud more than two decades after it collapsed in bankruptcy. That’s right, folks: Enron is back. But only kind of.”

“TL;DR: A company that makes T-shirts bought the Enron trademark and appears to be trying to sell some merch on behalf of the guy behind the satirical conspiracy theory “‘Birds Aren’t Real.’”

According to the NY Post, “trademark documents show an Arkansas-based LLC called The College Company bought the Enron trademark for $275 in 2020.”

👉 Here’s the company’s “we’re back” video:

On the new Enron website, there is also a countdown clock to something mysterious that is happening six days from now:

👉 The whole thing is pretty amusing creative perplexing. I don’t know what is happening six days from now (some kind of crypto offering maybe?) but I think it is safe to say the $275 this company paid for the Enron trademark is paying off.

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