SEC Enforcement Director Pushes Faster Investigations, Limits on Wells Meetings

SEC Enforcer: ‘You Bet’ There Will Be More Sweeps

Grewal is working to quicken the pace of investigations, noting that when he started with the SEC the average length of an investigation was 24 months. Grewal was appointed director of the Division of Enforcement in 2021.

“It’s important for accountability, for public trust to move those investigations more quickly, and it’s important for the people under investigation — you don’t want to hang under a cloud of suspicion for two years when we can move a matter more quickly,” he said at the conference.

To that end, not every case will get a Wells meeting with the director or deputy director, according to Grewal, referring to a process by which the regulator can interact with people or firms who are likely to be on the receiving end of an enforcement action after an SEC investigation.

“Unless there’s really a real factual dispute, a novel legal issue or an area of programmatic concern, you’re not going to get a meeting with the director or the deputy,” he said at the conference.

Charlie Javice indicted in JPMorgan Chase fraud

Charlie Javice, who has been accused of defrauding JPMorgan Chase into buying her now-shuttered college financial aid company Frank, has been indicted over her relationship with the bank.

A four-count indictment made public on Thursday in Manhattan federal court charges Javice with securities fraud, wire fraud, bank fraud and conspiracy.

Javice had been arrested on a criminal complaint on April 3, and charged with duping the largest US bank into buying Frank for $175 million in 2021.

FTX seeks to claw back over $240 million from Embed acquisition

Bankrupt crypto exchange FTX is seeking to claw back more than $240 million it paid for stock trading platform Embed, saying former FTX insiders did no investigation before buying the essentially worthless bug-ridden software platform.

FTX filed three lawsuits late Wednesday in U.S. Bankruptcy Court in Delaware targeting former FTX insiders including indicted founder Sam Bankman-Fried, Embed executives including founder Michael Giles, and Embed shareholders. FTX alleged that Bankman-Fried and other FTX insiders misappropriated company funds to acquire stakes in Embed as part of the transaction.

FTX closed on the Embed acquisition just six weeks before the crypto exchange collapsed into bankruptcy in November. FTX lost billions in customer money while propping up its own risky investments, actions its current CEO John Ray called “old-fashioned embezzlement.”

Guest Post: What has You Worried? Notes from WTW’s 2023 D&O Survey

The survey asks respondents to consider two principal categories of risk – risks for businesses and risks for directors and officers. Results from 2023, compared to the two prior years, are below. Consistent with prior years, the top two risk concerns for businesses were: “economic risks” and “cyber risks.” For the first time in the business risk part of the survey, we asked about risks associated with “regulatory/legislative change” and that has immediately come in as the overall number three risk for businesses.

For our purposes in this post, we focus on the responses of North American participants. Looking at the risks for directors and officers in this region, also consistent with prior years’ results, cyber-related exposures dominated all other risks in 2023. Specifically, “cyber attack” (a concern for 72% of respondents), “data loss” (68%), and “cyber extortion” (60%) comprised the top three risk concerns. Rounding out the top five were sub-topics first introduced in the survey this year, also cyber-related: “cyber crime” (55%) and “sufficient cyber expertise at board level” (38%). In fact, respondents in North America were more concerned about this last risk than respondents in any other region.

Crypto’s Bitcoin-Spot ETF Unlikely in US Near Future, VanEck’s Jan Van Eck Says

Investors aren’t likely to see a Bitcoin-spot exchange-traded fund offered in the US anytime soon, according to VanEck Chief Executive Officer Jan Van Eck.

“No chance,” Van Eck said as part of a panel at the Bitcoin 2023 conference in Miami Beach on Thursday. “Even if the SEC loses the Grayscale litigation, they’ll just drag their feet. So I just don’t see that in the next year and a half.” Van Eck was referring to asset-manager Grayscale Investments’s ongoing lawsuit against the US Securities and Exchange Commission in which it’s attempting to convert its Bitcoin trust into an ETF.

Miami Bitcoin Conference Flags Attendance Down by Half as ‘Crypto Winter’ Drags On

More than 35,000 people attended last year, according to the conference website. Speakers included tennis legend Serena Williams, controversial psychologist Jordan Peterson and MicroStrategy (MSTR) co-founder Michael Saylor.

This year, the website says approximately 15,000 devotees of the dominant cryptocurrency – fewer than half as many as last year, likely a symptom of crypto winter – will descend on the Miami Beach Convention Center to listen to the U.S. presidential candidates Kennedy and Vivek Ramaswamy, along with Lewis and U.S. Representative Patrick McHenry, the North Carolina Republican who heads the House Financial Services Committee.

Senators Elizabeth Warren and Roger Marshall’s Digital Asset Anti-Money-Laundering Act Won’t Stop Money Laundering, but It Could Ban Crypto

On Capitol Hill, Senator Elizabeth Warren (D-MA) and Senator Roger Marshall (R-KS), are pushing legislation that purports to close loopholes bad actors may exploit to launder money through crypto assets. But what the legislation – the so-called Digital Asset Anti-Money Laundering Act – actually does is further a strategy to ban crypto by treating software developers and transaction validators as financial institutions, in effect rendering crypto useless. Warren, after all, says she’s leading an “anti-crypto army.”