SEC IG Report Finds "Most Concerning" Attrition in Senior Officers, Attorneys

SEC Chairman’s Agenda Strains Resources, Internal Watchdog Finds

The Securities and Exchange Commission’s fast-paced rule-making agenda under Chairman Gary Gensler has stretched staff resources, and some officials worry it could increase the risk of lawsuits, the agency’s internal watchdog said in a recent report.

In meetings with the SEC’s inspector general, managers at the agency expressed concerns about short deadlines for staff to draft proposed rules and for public stakeholders to submit comments on them, according to the Oct. 13 report. Mr. Gensler’s rule-making teams have borrowed staff from across the agency, making it difficult to complete other parts of the SEC’s mission, managers reported.

While no one identified concrete errors in rule proposals, some managers told the inspector general that “the more aggressive agenda…potentially limits the time available for staff research and analysis, and increases litigation risk.”

FTX US Will Decide What Counts as a Crypto Security, CEO Bankman-Fried Says

The US arm of crypto trading giant FTX will begin conducting its own analysis to determine whether assets are securities before listing them, founder Sam Bankman-Fried said in a blog post published on Wednesday.

While US regulators have said some tokens, like Bitcoin, aren’t securities, “there are a number which are unclear,” the crypto executive wrote. Until there’s more clarity on the issue, FTX US will have its legal team conduct an analysis of each asset it wants to list under a decades-old framework for assessing whether something is a security, known as the Howey Test, Bankman-Fried added.

Crypto Billionaire Sam Bankman-Fried Tries to Fix Market’s Hacking Problem

Crypto billionaire Sam Bankman-Fried has outlined a framework for limiting the impact of the hacks and exploits plaguing the industry, including capping the maximum bounty for attackers at $5 million.

His intervention comes just days after a hacker got to keep $50 million of the roughly $100 million drained from the Mango decentralized-finance application under a deal with the platform after the heist. Over $3 billion has been looted from the crypto sector this year, which is set to be a record for hacking.

Bankman-Fried, co-founder of digital-asset exchange FTX, proposed in a blog post what he called a “5-5 standard” where hackers keep either 5% of the amount they’ve taken from a protocol or $5 million, whichever is smaller.

SEC accuses ex-CEO of NewAge, which shot to pot-stock fame, of ‘multi-year fraud’

The Securities and Exchange Commission has filed charges against former NewAge Inc. Chief Executive Brent David Willis, accusing him of a “multi-year fraud” that included misleading public statements meant to promote the wellness-focused beverage maker that once hoped to take advantage of the nation’s CBD craze.

The SEC alleged that Willis’ statements created the “illusion” that NewAge was a pioneer in beverages containing CBD — a cannabis compound that is viewed as non-intoxicating — and that its beverage products overall were taking off with big retailers and distributors worldwide, in an effort to boost the company’s financials and stock price.

Proposed health warning label for all ESG funds not in the impact investing space

Proposed health warning label for all ESG funds not in the impact investing space:

“This fund was not created with the goal of cooling the planet, saving the whales, combating racism, or having any other positive impact on the environment or society, either in the short or long term. Any positive impact this fund does have will be purely coincidental. The managers of this fund do not measure ESG impact and thus impact data will not be disclosed. The fund managers are not responsible for any negative impact this fund or any of its portfolio companies may have on the environment or society.”

Wash Trading

What? No. The system worked. He created some fake cryptocurrencies, fake traded them with himself, got them up to a multitrillion-dollar fake valuation, and then was unable to cash them out at any value other than zero, which is their actual value. And then instead of trying to trick anyone into buying them, he went to Wired to be like “look at this dumb thing I did.” This is all fine.

Ex-Goldman Sachs analyst and lawyer brother faces 2023 UK insider trading trial

A former Goldman Sachs analyst and his brother, who was a lawyer at Clifford Chance, face a trial in London next year for alleged fraud and insider dealing.

Mohammed Zina, 34, who was employed by Goldman Sachs International in the conflicts resolution group of its London office, and Suhail Zina, 35, formerly an associate at Clifford Chance, were charged in February 2021 with six offenses of insider dealing and three of fraud by false representation.

The pair pleaded not guilty to all nine charges at a previous hearing.

At a brief hearing at London’s Southwark Crown Court on Wednesday, Judge Gregory Perrins said the brothers’ trial will take place in November 2023.

Corporate Directors Resign as U.S. Targets Overlaps at Competing FirmsBoard members at Udemy Inc., SolarWinds Corp. and three other public companies resigned in recent weeks because they simultaneously served as directors of competing companies, the Justice Department said.

The moves came after DOJ officials signaled earlier this year that they would enforce a law that bars people from serving on the boards of rival companies, an arrangement that could lead to illicit collusion. The Justice Department is reviewing whether other directors and companies have violated the law, senior officials said.

“Competitors sharing officers or directors further concentrates power and creates the opportunity to exchange competitively sensitive information and facilitate coordination—all to the detriment of the economy and the American public,” Assistant Attorney General Jonathan Kanter said.