SEC Charges RTX Corp. with FCPA Violations in Connection with Obtaining Contracts with Qatari Military

SEC Charges Virginia-Based RTX Corp. with Violating Foreign Corrupt Practices Act in Connection with Efforts to Obtain Contracts with the Qatari Military

The Securities and Exchange Commission today announced that RTX Corporation, a Virginia-based aerospace and defense company, agreed to pay more than $124 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA) in connection with payments made to assist in obtaining contracts with the Qatari military. RTX, which was named Raytheon Technologies Corp. until 2023, was formed after the 2020 merger of Raytheon Company and United Technologies Corp. (collectively, Raytheon).

According to the SEC’s order, Raytheon used sham subcontracts with a supplier to pay bribes of nearly $2 million to Qatari military and other officials from 2011 to 2017 to obtain Qatari military defense contracts. Additionally, the order finds that from the early 2000s into 2020, Raytheon paid more than $30 million to a Qatari agent who was a relative of the Qatari Emir and who, despite being retained as Raytheon’s representative in Qatar, had no prior background in military defense contracting. Raytheon obtained additional defense contracts through the agent under circumstances with significant corruption risks. The order finds that Raytheon continued working with the agent even after numerous Raytheon employees raised concerns about risks of corruption and despite a lack of adequate documentation of the agent’s services.

FBI Arrests Alabama Man in the January 2024 SEC X Hack that Spiked the Value of Bitcoin

Eric Council Jr., 25, of Athens, Alabama, was arrested this morning, in Athens, in connection with a January 2024 unauthorized takeover of the U.S. Securities and Exchange Commission’s (SEC) X account, formerly known as Twitter, in which hackers posted a fake message from the SEC Chair that caused the value of bitcoin (BTC) to spike by $1,000. Council is expected to make an initial appearance today in the Northern District of Alabama.

Council is charged by indictment, unsealed today, with conspiracy to commit aggravated identity theft and access device fraud. The arrest and the indictment were announced by United States Attorney Matthew M. Graves, Principal Deputy Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, FBI Acting Special Agent in Charge David Geist of the Washington Field Office’s Criminal and Cyber Division, and SEC Inspector General Deborah Jeffrey.

According to the indictment, on January 9, 2024, Council conspired with others to take unauthorized control of the @SECGov X account (sometimes called the SEC’s Twitter account) and transmitted a fake post in the name of the SEC Chair, falsely announcing, in part, “Today the SEC grants approval for #Bitcoin ETFs for listing on all registered national securities exchanges.” Immediately after the tweet, the price of BTC increased by more than $1,000 per bitcoin.

Historic bitcoin theft tied to Connecticut kidnapping, luxury cars, $500K bar bills

Two young men accused of committing one of the largest person-to-person crypto thefts in U.S. history went on a brazen spending spree that included buying exotic cars, a $2 million wristwatch, renting mansions and running up nightclub tabs of hundreds of thousands of dollars apiece, new court records reveal.

The Aug. 18 cyber heist swindled a Washington, D.C., resident out of $230 million in cryptocurrency. To date, at least $100 million in bitcoin stolen from the victim remains unaccounted for, prosecutors said in a recent court filing in D.C federal court.

Police now say that another crime, the mysterious Aug. 25 kidnapping of a Connecticut couple in broad daylight while they were house hunting, may be connected to the Washington crypto theft.

Authorities are investigating whether the kidnapping was part of a plot to demand ransom from the couple’s son — who is being investigated for possible involvement in the crypto heist.

“I’ve never seen anything like this in 20 years,” Detective Sgt. Steven Castrovinci of the Danbury, Connecticut, Police Department, told CNBC.

Nvidia High Court Test Weighs Securities Suits as SEC Backstop

Nvidia Corp.’s argument before the US Supreme Court next month pits the software and computing giant not only against investors alleging securities fraud, but also against two federal agencies that have thrown their support behind the shareholder lawsuit.

The Securities and Exchange Commission and the Justice Department said in an amicus brief that the investors’ complaint contained sufficient fraud allegations for the high court to uphold the US Court of Appeals for the Ninth Circuit reviving the proposed class action.

The justices this week granted Solicitor General Elizabeth Prelogar’s request to weigh in at the case’s Nov. 13 hearing. The government’s bid signals the administration’s interest in maintaining the steady flow of private securities actions as a complement to the SEC’s own limited enforcement capacity, according to attorneys and law professors.

Crypto.com v. SEC Is a Bold, ‘Bet the Company’ Case

First of all, the firm hired Noel Francisco, a former U.S. Solicitor General, to represent it. Former Solicitor Generals like Francisco and Uniswap’s counsel Don Verrilli represented the United States government in the Supreme Court. They are among the very best and most experienced appellate litigators in the country, and, one can safely guess, among the most expensive. You don’t hire Noel Francisco to posture. You hire Noel Francisco to go to war.

Perhaps serendipitously, Crypto.com had recently established a North American headquarters in Tyler, Texas (the Singapore-based firm previously had small satellite offices in Miami and Chicago). It signed the lease in May, just three months before receiving the Wells notice. The move placed Crypto.com squarely in the jurisdiction of the U.S. District Court for the Eastern District of Texas (E.D.Tex). E.D.Tex., long famed for being the home of patent “forum shopping,” is well known as one of the most conservative in the country, particularly when it comes to the authority of federal agencies.

Even more important than the district court is the appellate circuit it sits in. The Fifth Circuit Court of Appeals is the single most influential court for anti-agency jurisprudence in the country….

Financial Firms Need to Focus on Cyber Risks Posed by AI, New York Regulator Says

New York’s financial regulator said firms need to address the specific cybersecurity risks arising from the use of artificial intelligence, as more regulators aim to ensure the safe use of this rapidly evolving technology.

The New York State Department of Financial Services on Wednesday issued a new guidance document that advises the entities it regulates to monitor and assess risks from AI-enabled tools, as part of the agency’s existing cybersecurity regulation. The department said financial-services firms need to better understand AI-related risks, including from social engineering, cyberattacks and the theft of nonpublic information.