SEC Says Man Defrauded Investors by Posing as Hedge Fund Billionaire with Harvard MBA

SEC Charges Man for Defrauding Investors out of Millions of Dollars by Posing as Hedge Fund Billionaire

According to the SEC’s complaint, Costello portrayed himself to the public as a seasoned, licensed investment professional who was building a conglomerate in the cannabis industry. His alleged false representations included credentials as a Harvard MBA, experience managing a $1.15 billion hedge fund, and years of experience on Wall Street. As alleged in the complaint, Costello used these fabricated accomplishments to secure approximately $900,000 of investments in two different companies from more than 30 investors. As further alleged in the complaint, while acting as an investment adviser to a married couple, Costello sold the couple $1.8 million of shares in a penny stock at a markup of 9,000 percent over the price paid by Costello and used their $4 million brokerage account to trade, at a significant loss, securities of microcap companies in which Costello had an undisclosed financial interest.

The complaint also alleges that Costello and Ferraro engaged in various stock promotion schemes in which Costello acquired shares of penny stocks and then directed Ferraro to promote those stocks to Ferraro’s Twitter followers and the public. The complaint alleges that Ferraro posted hundreds of tweets to hype those stocks and did not disclose that Costello intended to sell his shares once the stock price increased or that Ferraro would receive a share of Costello’s profits. Through these alleged schemes, Costello and Ferraro together made approximately $792,000 in illicit trading profits.

Breaking Down the SEC and CFTC’s Autumn Wave of Enforcement Actions

“The SEC & CFTC end their fiscal year on September 30, so this is their last chance to score big wins they can highlight in their budget requests to Congress,” Jake Chervinsky, head of policy at the Blockchain Association, tweeted. (He’s made the point before.)

This year is no different. Within the past 10 days at least three lawsuits were filed against crypto projects. One company was accused of market manipulation, a crypto influencer was charged with failing to report income and there’s even a decentralized autonomous organization (DAO) thrown into the mix.

The SEC is often accused of regulating through enforcement rather than issuing clear guidance. While the accused projects mentioned are comparatively small, each enforcement has a legal wrinkle that analysts think could set a dangerous precedent. It seems as though in the mad dash to file cases before the end of the fiscal year, mistakes can be made.

Bourbon Insider Trading – Bloomberg

This is a rule of securities law, though sort of an unwritten one: There is no specific statute banning insider trading, but there is a long tradition of treating it as a form of securities fraud. Using that secret inside information to trade stock is a form of fraud, on someone. (It’s not always clear who: The people on the other side of your trades? The people whose information you misused? Both?)

By analogy, you might assume that using secret inside information to trade anything else is also a form of fraud. We talked about this in June in the context of an insider trading case against a former employee of OpenSea, a marketplace for nonfungible tokens; the employee allegedly knew in advance which NFTs would be advertised on OpenSea’s homepage and bought them so he could flip them at a profit. NFTs are (probably) not securities, so this is not securities fraud, so it’s not classic insider trading. But it’s so much like insider trading that prosecutors charged him with wire fraud anyway. If insider trading securities is securities fraud, then insider trading non-securities is wire fraud.

Anyway it’s not wire fraud but here’s a bourbon insider trading prosecution…

Vivek Ramaswamy: the self-styled scourge of ‘woke’ boardrooms | Financial Times

Ramaswamy last week wrote public letters to Apple telling it to halt plans for a racial equity audit and to Disney insisting that the company stop “speaking out on political issues that do not affect its business” such as gay rights. He also said he met recently with Chevron’s chief financial officer to lay out his belief that oil companies have no business trying to bring down the carbon emissions of their suppliers and customers.

“It’s like McDonald’s volunteering to take responsibility for the adult body weight of anyone who’s eating a Big Mac,” he said, over a meal during which he ordered five different Mexican dishes, took a few bites of each and left the rest uneaten.

Nancy Pelosi’s Congressional Stock Ban Isn’t as Strict as It Sounds

By including the spouses and dependents of federal officials in its ban, the bill addresses one of the key methods lawmakers may employ to dodge conflict of interest accusations. Still, the requirement that officials enter their assets into a blind trust could create new ethics concerns and potentially eliminate current transparency initiatives, according to Walter Shaub, the former director of the Office of Government Ethics under Barack Obama. “In reaction to the Watergate scandal that toppled the Nixon presidency, Congress passed the Ethics in Government Act. Among other things, that act created strict new requirements for blind trusts in the federal government,” wrote Shaub in a Twitter thread. “Pelosi’s bill would eliminate all of these requirements by authorizing each ethics office to allow anything they want and call it a blind trust. Literally anything. There are no limits in the bill as to what these offices can do.”

NFT trading volume plunges 98% from January despite rise in adoption

According to data compiled from Dune Analytics, the weekly trading volume of nonfungible tokens, or NFTs, across the blockchain realm has plunged to $114.4 million.

This represents a decrease of 98% from the $6.2 billion witnessed around the end of January. Weekly NFT trading volume rose to an all-time high of $146.3 billion in early April before falling off a sharp cliff in May with the start of an ongoing crypto bear market.

California Moves Forward to Allow Vital Records to be Issued on Blockchain

Californians will have the option of a blockchain-based delivery of their vital records after a new law was approved establishing the technology as an integral part of state recordkeeping.

The state has been wrestling with a number of cryptocurrency proposals, and though Gov. Gavin Newsom vetoed a crypto licensing and regulation bill this week – seen as a possible West Coast version of New York’s BitLicense – he approved another on Wednesday that instructs county records offices to allow for the use of blockchain technology and verifiable credentials. The technology would be established in the distribution of birth, death and marriage records, allowing PDFs to be sent immediately rather than using a typical 10-day postal delivery.

Women on S&P 500 Bank Boards Gain Just Two New Seats in 2022Women failed to gain any board seats at the largest US banks in August, and have picked up only two net seats this year among members of the S&P 500 Bank Index, according to data compiled by Bloomberg.

After hitting 35% of seats for the first time this year, female directors have mostly kept to the status quo. The share of women among the bank boards in August was unchanged from July at just shy of 35%, following a decline in June, Bloomberg data show. The two seats gained through August among the 18 banks compares with four at this point last year.