SEC Prevails in Five-Day Jury Trial on Charges of False and Misleading Statements to Investors

Statement on Jury’s Verdict in Trial of R. Brian Watson and Northstar Commercial Partners

Today, after a five-day trial, a jury in the United States District Court for the District of Colorado found defendants R. Brian Watson and his company, Northstar Commercial Partners, liable for intentional securities fraud.

As shown by the evidence at trial, Watson and Northstar defrauded investors in 11 different offerings over the course of about 36 months. Defendants told investors that Watson “co-invested” in every real estate offering by investing his personal funds in Northstar-sponsored real estate projects alongside investors who were also investing in common equity. The statements were false and misleading because Watson did not co-invest his personal funds as promised. These repeated misstatements over time facilitated a scheme and course of business that defrauded investors.

SEC Names Retired EY Partner to Run Audit Watchdog

The Securities and Exchange Commission appointed retired EY partner Demetrios (Jim) Logothetis to lead the watchdog tasked with inspecting public-company audits and disciplining firms for violations.

The securities regulator also tapped Mark Calabria, Kyle Hauptman and Steven Laughton as board members of the Public Company Accounting Oversight Board. George Botic, a board member and the acting chair, will remain on the board.

The SEC has been gathering a new slate of board members for the PCAOB, created after the Enron and WorldCom accounting scandals of the early 2000s to boost financial oversight.

SEC’s Motives for AI Adoption Could Strengthen Market Oversight

Enforcement Can Benefit

SEC enforcement stands to benefit from generative AI’s ability to process the massive, unstructured narrative datasets—such as emails, call transcripts, internal reports—that have traditionally served as sources of potentially critical evidence. These datasets present a significant analytical challenge because they lack the consistent format best suited for database analytics. Instead, they require interpreting ambiguity, context, and semantic nuances, which challenge the limits of traditional text analytics approaches.

The most immediate application of this technology lies in the SEC’s Tips, Complaints, and Referrals, or TCR, system, which annually ingests over 45,000 leads ranging from highly detailed whistleblower reports to vague or irrelevant grievances. Managing this volume with manual review or text analytics tools creates a considerable administrative burden. Generative AI can serve as an initial triage tool by categorizing submissions based on the specificity and verifiability of their allegations, which could considerably speed up the initial review process and thereby reduce administrative burden.

Did A.I. Take Your Job? Or Was Your Employer ‘A.I.-Washing’?

A company might lay people off for any number of reasons: It didn’t meet financial targets. It overhired. It was rocked by tariffs, or the loss of a big client.
But lately, many companies are highlighting a new factor: artificial intelligence. Executives, saying they anticipate huge changes from the technology, are making cuts now.

A.I. was cited in the announcements of more than 50,000 layoffs in 2025, according to Challenger, Gray & Christmas, a research firm. […]

Investors may applaud such pre-emptive moves. But some skeptics (including media outlets) suggest that corporations are disingenuously blaming A.I. for layoffs, or “A.I.-washing.” As the market research firm Forrester put it in a January report: “Many companies announcing A.I.-related layoffs do not have mature, vetted A.I. applications ready to fill those roles, highlighting a trend of ‘A.I.-washing’ — attributing financially motivated cuts to future A.I. implementation.”

The Wild Markets Behind Polymarket’s ‘Truth Machine’

Just before dawn on Nov. 13, 2024, FBI agents smashed through the door of Shayne Coplan’s penthouse apartment in Manhattan, barged into his bedroom and grabbed his phone.

Federal prosecutors were investigating whether the cryptocurrency-based betting platform he founded, Polymarket, where users can wager on everything from presidential elections to the identity of the next James Bond actor, was violating laws designed to prevent money laundering.

Fourteen months later, the fortunes of the shaggy-haired 27-year-old couldn’t be more different. The Justice Department has dropped its probe. Donald Trump Jr., whose venture-capital firm is an investor, joined the company as an adviser. The New York Stock Exchange’s parent company struck an investment deal that boosted Polymarket’s value to $9 billion and made Coplan a billionaire. And his startup, which had long been off-limits to U.S. users, was cleared to launch a betting app for them.

Polymarket’s rise comes as wagering on sports, bitcoin, elections and just about everything else has grown ubiquitous, and barriers between traditional investments, crypto and gambling are eroding.