SEC Establishes Financial Reporting and Accounting Unit in Enforcement Division

The Securities and Exchange Commission today announced it is establishing a new specialized unit within the Division of Enforcement to provide the dedicated expertise, focus, and capacity to pursue accounting and financial reporting fraud cases as well as general misconduct in the accounting and auditing areas. The Financial Reporting and Accounting Unit will work in close collaboration with staff across all relevant SEC divisions and offices to ensure its approach to enforcing federal securities laws is consistent with the Commission’s policy goals.

“Since my return to the Division, I have been assessing every aspect of our staffing to ensure that we are aligned to deliver results in our core mission areas,” said David Woodcock, Director of the SEC’s Division of Enforcement. “This new unit – which expands on the Division’s current and historical efforts to crack down on bad actors in the accounting and auditing profession – will be critical in our efforts to pursuing financial reporting fraud, as well as accounting and auditor misconduct more generally.”

The unit will be led by Timothy Zimmerman, who joined the SEC’s Division of Enforcement in May 2026 as a senior advisor to the Director....

by SEC Press Release

Big US hedge funds targeted by wave of cyber attacks

Several of the biggest hedge funds on Wall Street have been targeted by a wave of cyber attacks, putting the industry on high alert to the risk of vulnerabilities in their software systems.

Billionaire Steve Cohen’s Point72 and Ken Griffin’s Citadel were among the hedge funds that were targeted by audio “phishing” attacks, attempts to obtain private information through phone calls and similar means, in recent days, according to people familiar with the matter.

Millennium Management was also targeted by cyber attacks, according to a person familiar with the matter.

All of the firms run complex risk systems with confidential trading information and manage tens of billions of dollars, making them prime potential targets for cyber criminals.

by FT Cryptofinance

Biggest US law firms explore selling stakes to private equity

Several top US law firms have explored selling stakes in their businesses to private equity groups without triggering rules that bar ownership by non-lawyers.

Paul Weiss, Quinn Emanuel and Proskauer are among firms to have had conversations with private equity groups or bankers to consider taking outside capital, according to people with knowledge of the matter.

US ethics rules prevent law firms from being owned by non-lawyers, which has left them as one of the few areas of the economy untouched by buyout groups.

by FT Cryptofinance

Another AI Spending-Related Securities Class Action

Artificial intelligence-related securities litigation continues to accelerate, with plaintiffs increasingly targeting not only alleged misstatements about AI products and capabilities, but also companies’ disclosures regarding their investments in AI and the impact of those investments on business operations. A couple of recently filed lawsuits challenge AI-related spending and capital allocation decisions, which may underscore whether growing investor scrutiny of whether management adequately disclosed the financial risks, costs, and tradeoffs associated with aggressive AI initiatives.

Illustrating this emerging line of AI-related securities litigation, a shareholder lawsuit filed on July 29, 2026, against Rackspace Technology, Inc. (Rackspace), its CEO, and CFO in the Southern District of New York alleges that the company failed to disclose the financial and operational consequences of its enterprise AI strategy. As discussed in more detail below, the Rackspace SCA highlights how increasing scrutiny over companies’ AI-related spending may have significant impact on D&O underwriters.

by The D & O Diary

NFT Startup Founder Charged With Fraud

Sean S. Buckley, Deputy United States Attorney, and Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), James C. Barnacle, Jr., announced that TAJ TARSHA, the founder of Few and Far Limited (“Few and Far”), has been indicted for securities and wire fraud for defrauding investors of the crypto startup he founded by making false and misleading statements regarding the use of investor funds and subsequently misappropriating those funds. TARSHA was previously arrested on June 6, 2026. The case has been assigned to U.S. District Judge Lewis A. Kaplan. [...]

TARSHA was the founder and sole equity owner of Few and Far, a startup that claimed to be developing a decentralized marketplace for non-fungible tokens (“NFTs”). Beginning in February 2022, TARSHA solicited investments in Few and Far through Simple Agreement for Future Tokens (SAFTs), under which investors paid upfront for rights to receive FAR tokens—a proprietary token meant to be integrated into the marketplace—at a later date. The offering materials promised investors that their funds would be used to advance the development of the Few and Far marketplace and the FAR tokens. Through these sales, TARSHA raised over $10 million from the sale of 95 million FAR tokens to at least 67 investors.

Almost immediately, however, TARSHA began misappropriating investor funds for his personal use, including gambling at an online casino and purchasing speculative cryptocurrencies. TARSHA also siphoned nearly a million dollars of investor funds under the pretext of legitimate compensation in the form of two bonuses—which he deliberately hid from investors and a co-founder—and a high salary that he acknowledged was unreasonable in light of Few and Far’s lack of product and “zero revenue.”

by DOJ Press Releases