SEC Quietly Shuts Down ESG Task Force

SEC Abandons ESG Enforcement Group Amid Broader Backlash

The SEC has quietly disbanded a group of enforcement lawyers who helped bring litigation fighting misleading environmental, social and governance disclosures for more than three years.

The Securities and Exchange Commission shut down its Enforcement Division’s Climate and ESG Task Force within the past few months, an agency spokesperson told Bloomberg Law Thursday.

The agency launched the group in March 2021 under then-Acting SEC Chair Allison Lee with nearly two dozen staffers, who helped on the task force as they continued other jobs. SEC Chair Gary Gensler continued the group when he arrived at the agency in April 2021. The group went on to help with cases against Bank of New York Mellon Corp., Goldman Sachs Group Inc., Brazilian miner Vale SA and others.

SEC Charges Three Former Executives of Pharmacy Startup Medly Health Inc. with Defrauding Investors

The Securities and Exchange Commission today charged now-defunct digital pharmacy startup Medly Health Inc’s. co-founder and former CEO, Marg Patel, former CFO, Robert Horowitz, and former Head of Rx Operations, Chintankumar Bhatt, with defrauding investors in connection with capital raising efforts that netted the company over $170 million.

According to the SEC’s complaint, from at least February 2021 through August 2022, Patel and Horowitz provided financial information to existing and prospective investors that fraudulently overstated Medly’s revenue due in part to millions of dollars’ worth of fake prescriptions entered into the company’s systems by Bhatt. The SEC’s complaint alleges, among other things, that Patel and Horowitz knew of, but failed to correct, significant accounting irregularities and were aware of several reports and complaints by employees that the revenue reported in Medly’s financial statements to investors was inaccurate.

Law firms Quinn Emanuel, Cohen Milstein get $102 mln from stock lending settlement

A U.S. judge has awarded $102 million in legal fees to law firms Quinn Emanuel Urquhart & Sullivan and Cohen Milstein Sellers & Toll for their work on a $580 million settlement for investors who accused major banks of conspiring to curb competition in the stock lending market.

In an order on Wednesday, U.S. District Judge Katherine Polk Failla in New York called the legal fee amount “fair and reasonable,” amounting to 17.06% of the settlement funds so far in the case.

The institutional investors that filed the lawsuit in 2017 claimed a group of big banks had conspired to prevent modernization in the trillion-dollar market for stock lending, boycotting startup firms.

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The co-lead attorneys told the judge in May that they had spent more than 180,000 hours of attorney time over six years without pay in the case.

Leading DC Firms Play Long Game in Life After Chevron Ruling

Big Law firms, many of which anticipated the decision, created new task forces to address increasing client demand after the ruling.

Some have sought to establish themselves as “thought leaders” in the post-Chevron era, said DC-area legal recruiter Stuart TenHoor.

Sidley Austin launched a regulatory litigation practice in 2023. WilmerHale, in the immediate aftermath of the Loper Bright ruling, organized lawyers into industry-focused working groups. Morgan Lewis & Bockius rolled out a 20-lawyer “Chevron Task Force” following steady hiring out of government agencies over the last two years.

eToro Reaches Settlement with SEC and Will Cease Trading Activity in Nearly All Crypto Assets

The Securities and Exchange Commission today announced that eToro USA LLC has agreed to pay $1.5 million to settle charges that it operated an unregistered broker and unregistered clearing agency in connection with its trading platform that facilitated buying and selling certain crypto assets as securities. eToro has agreed to cease and desist from violating the applicable federal securities laws and will make only a limited set of crypto assets available for trading.

The SEC’s order finds that, since at least 2020, eToro operated as a broker and clearing agency by providing U.S. customers the ability, through eToro’s online trading platform, to trade crypto assets being offered and sold as securities, but eToro did not comply with the registration provisions of the federal securities laws.

eToro publicly announced that, going forward and subject to the provisions of the SEC’s order in this matter, the only crypto assets that U.S. customers can trade on the company’s platform will be Bitcoin, Bitcoin Cash, and Ether. eToro publicly announced that it will provide its customers with functionality to sell all other crypto assets for only 180 days after the issuance of the SEC’s order.

Federal Judge Threatens Ryan Salame With Sanctions After Former FTX Exec Says He Lied About Plea Deal Last Year

A federal judge on Thursday told former FTX executive Ryan Salame that he could be hit with sanctions after Salame lied to the judge about prosecutors not making promises to him as part of his plea deal last year, CNBC reported.

Ryan Salame pled guilty to campaign finance violations as well as running an unlicensed money transmitting business in September 2023, for which he was sentenced to 7.5 years in prison in May.

But in a 32-page memorandum to U.S. District Court Judge Lewis Kaplan of the Southern District of New York (SDNY) last week, Salame argued that prosecutors had promised him that they would cease any investigations into Michelle Bond, Salame’s long-time partner and mother of his child, as part of his plea deal.