SEC Overturns Its Initial Denial of Whistleblower Award to Kyle Bass

Kyle Bass Wins Reversal of SEC Move to Deny Whistleblower Award

The SEC acknowledged that activist investor Kyle Bass should have been paid as a whistleblower two years ago, apparently the first time it has overturned a decision to deny an award in response to a federal court challenge.

The Securities and Exchange Commission’s new ruling, issued without any notice to the federal court hearing Bass’s appeal, awarded the Texas billionaire $400,000 for his help in exposing fraud at a Dallas land developer. Bass said he deserved $2.5 million. A second informant on the same case was given more than $2 million.

The commission initially ruled Bass wasn’t entitled to an award because he was acting on behalf of his company, Hayman Capital Management, and not as an individual tipster. In response to Bass’s appeal to the US Court of Appeals for the Fifth Circuit, the SEC took the unusual step of asking that the case be returned to it, writing that it may have misinterpreted an “ambiguous” email from Bass’s attorney.

The SEC now agrees that Bass acted as an individual tipster.

SEC Cyber Disclosures Delayed Several Times Since December

The U.S. government has delayed public disclosures of cyber incidents several times since new rules came into force last December, a senior Justice Department official said.

On a number of occasions, the Justice Department has delayed companies’ disclosures because making the attacks public would create substantial risks and raise national-security concerns, said Matthew Olsen, assistant attorney general for national security. Olsen was speaking at The Wall Street Journal’s Tech Live: Cybersecurity conference here Thursday.

The Justice Department hasn’t previously said that it has granted national-security exemptions under rules from the U.S. Securities and Exchange Commission that came into force in December.

Mike Lynch, U.K. Tech Mogul, Is Acquitted of Fraud

Mike Lynch, a British software mogul who was once one of his country’s most celebrated chief executives, was acquitted of fraud on Thursday in San Francisco federal court, clearing him of charges that he had led one of the biggest frauds in the technology industry.

A jury found him not guilty of falsely inflating revenue at Autonomy, the company he founded and led, when he sold it to Hewlett-Packard for $11 billion in 2011.

Mr. Lynch, 58, who faced decades in prison, had initially been charged with 16 counts of fraud and conspiracy, though one fraud charge was eventually dismissed.

SEC sued by trade association for details on record-keeping probe

A financial industry trade association has sued the U.S. Securities and Exchange Commission for information about the agency’s multibillion-dollar crackdown on how banks and other firms handle work-related communication on personal devices.

The American Securities Association said in its lawsuit in Tampa federal court on Thursday that the SEC had improperly rejected its request under federal public records law for information detailing the enforcement effort, which began in late 2021 and has resulted in civil fines of more than $1.7 billion overall.

NYAG Sues 2 Crypto Pyramid Schemes, Promoters Targeting Haitian-Americans in $1B Scam

New York Attorney General Letitia James has filed suit against two purported crypto companies and their top promoters, a married couple, for allegedly operating two consecutive pyramid schemes that predominantly targeted Haitian immigrants to the U.S.

According to the complaint filed Thursday, the two schemes – AWS Mining and NovaTechFX – preyed on Creole-speaking church-goers via WhatsApp group chats, bilking investors out of more than $1 billion.

Former Federal Prosecutors, Agents Ask U.S. Sec. Blinken to ‘Step Up’ Efforts to Secure Detained Binance Exec’s Release

A group of 108 former federal prosecutors and agents have signed a public letter to U.S. Secretary of State Antony Blinken urging the State Department to “step up” its efforts to secure Binance compliance head Tigran Gambaryan’s release from a Nigerian prison, Axios reported Thursday evening.

The letter, reportedly spearheaded by investor and Coinbase board member Katie Haun – a former federal prosecutor – called the government’s minimal efforts to intervene on Gambaryan’s behalf “wholly lacking,” stressing that the “consequences of further inaction are potentially dire.”