SEC Notifies Court it Will Appeal Ripple Labs Crypto Decision

SEC Seeks to Appeal Crypto Ruling on Ripple Labs XRP Token

The US Securities and Exchange Commission said it intends to challenge a federal judge’s ruling that Ripple Labs Inc.’s XRP token isn’t a security when sold to the general public.

US District Judge Analisa Torres in New York last month said the crypto firm’s sales of XRP to sophisticated investors met the test for an investment contract under federal securities law because those buyers “would have understood that Ripple was pitching a speculative value proposition for XRP with potential profits.” But the judge said that didn’t apply to programmatic investors, meaning the broader public buying crypto on exchanges.

Everything is securities fraud

We talked a few years ago about a shareholder lawsuit against Oracle Corp. for not doing enough to implement its diversity policies; now here’s one against Target for doing too much. “Everything is securities fraud” started as mostly a left-ish sort of idea, that you could sue companies for securities fraud to punish pollution or sexual harassment, but the idea is too good and too all-purpose to be limited to one side of American politics. Caring about diversity is securities fraud, and not caring about diversity is securities fraud, because everything is securities fraud, as long as the stock goes down.

Frank Founder Charlie Javice’s Lawyers Accuse Prosecutors of Pressuring Her

Charlie Javice accused US prosecutors of trying to turn up the heat in the criminal fraud case against her by blocking information exchanges in a separate lawsuit filed by JPMorgan Chase & Co., which claims she tricked the bank into buying her Frank college financial-planning website.

There’s no legitimate reason for prosecutors to halt discovery in the Delaware civil case so that Javice can’t use it to bolster defenses in the criminal case, her attorneys said in a court filing. Javice and a colleague were charged with defrauding JPMorgan when it acquired Frank for $175 million and made them executives at the bank. They were both fired.

Jamie Dimon, JPMorgan board defeat shareholders’ Jeffrey Epstein lawsuit

A federal judge has dismissed a shareholder lawsuit accusing JPMorgan Chase Chief Executive Jamie Dimon and his board of directors of ignoring red flags surrounding disgraced former client Jeffrey Epstein.

In a Wednesday evening decision, U.S. District Judge Jed Rakoff said shareholders led by Miami and Pittsburgh pension funds failed to first ask the bank’s board directly to address their concerns, or show it would be futile to do so, before suing.

US Companies Slow Progress in Recruiting Black Directors to Boards

The share of new Black directors at S&P 500 companies fell by nearly in half in 2023, returning to levels closer to those seen before the murder of George Floyd by police brought fresh attention to the lack of diversity on corporate boards.

Black directors made up 15% of the newly appointed board members appointed by companies in the S&P 500 last year, a drop from 26% in 2022 and heading back towards the 11% mark of 2018, executive recruiter Spencer Stuart said Tuesday in a report. The representation of other non-White directors was about the same as a year ago and stronger than in 2018: Hispanic directors were 9% of new appointments, up from 8% in 2022, but still about half their representation in the overall population, the data showed. Black people are about 12% of the US population.

SEC Should Reject Bitcoin ETF Filings Because They Will Expose Investors to Fraud, Manipulation, and Other Investor Harms

Scott Farnin, Legal Counsel, issued the following statement on the filing of Better Markets’ Comment Letters (found here and here) to the Securities and Exchange Commission (SEC) in response to multiple proposed rule changes filed by national securities exchanges to list and trade shares in spot bitcoin-based exchange traded products (“ETP”):

“The crypto industry’s track record is clear when it comes to consumers, investors, and financial stability. The industry has suffered $2 trillion in losses; multiple enforcement actions, bankruptcies, and criminal prosecutions; and dozens of lawsuits for lying, cheating, and stealing. Meanwhile, the principal beneficiaries of the crypto craze are the criminals who use it to facilitate ransomware, money laundering, and illegal conduct of all types. It is within this context that the SEC must evaluate latest wave of Bitcoin ETF filings this month.

“For years the SEC has rightfully rejected multiple attempts by national securities exchanges and sponsors to list and trade shares in spot bitcoin-based ETPs. Our comment letters urge the SEC to remain consistent with its previous orders disapproving such filings and reject the eight proposed rule changes pending before the agency.

China’s Economy Isn’t Ailing—It’s ‘Evolving’: IPO Lawyers Told to Watch Their Language

Regulators in China have become uncomfortable with how some companies are describing the country’s risks to international investors.

Last month officials from the country’s securities regulator told a group of domestic law firms to soften the wording of China-specific risk disclosures in overseas stock-listing documents, according to people familiar with the meeting. The officials suggested alternative descriptions of certain risks and said some should be dropped entirely.

The lawyers were told to avoid mentioning “adverse changes” in China’s economy and to describe it as “evolving.” Instead of saying that the country’s administrative and court proceedings can be protracted, they were advised to point out simply that China’s legal system is different from other jurisdictions. And rather than saying that laws and regulations in the country can change “without notice,” the guidance was to use wording about how they could change “from time to time.”