SEC Seeks to Apply Favorable Wahi Ruling to Coinbase Case

In Coinbase enforcement action, US SEC tries to capitalize on win in little-noticed case

On Monday, the agency informed Failla, opens new tab that U.S. District Judge Tana Lin of Seattle concluded in the Coinbase insider trading case that the tokens allegedly purchased with insider info were indeed investment contracts, even though defendant Sameer Ramani traded the assets on a secondary exchange and not directly with issuers. (Ramani, who has allegedly fled the country, did not appear in the SEC proceeding, which also named former Coinbase employee Ishan Wahi and his brother Nikhil Wahi as defendants.)

As the SEC told Failla in Monday’s letter, Coinbase was among the amici that filed briefs in the Seattle case arguing that exchange-traded tokens are not securities. The agency said Lin’s ruling to the contrary was particularly notable in light of those amicus arguments, including by Coinbase.

Binance. US Cut Two-Thirds of Its Workforce as Revenue Plunged After SEC Lawsuit: Court Transcript

This loss of $1 billion in assets led to a 75% loss in revenue and 200 layoffs – two-thirds of its workforce – at the U.S.-incorporated arm of Binance. This reduction in headcount has impacted the exchange’s ability to respond to discovery requests from the SEC because teams are stretched thin.

Blodgett also said that the exchange’s legal costs skyrocketed to $10 million, and its auditor expenses have increased by “10x” in addition to the loss of banking relationships, which allowed customers to withdraw their digital assets into fiat.

“In the immediate wake of the TRO, our banks demanded drastic increases in collateral. But eventually, they fully terminated the relationship. As a result, our customers were prevented from depositing and withdrawing fiat to the platform, effectively choking the business,” he said.

Since then, the exchange has been unable to find new banking partners to work with it, Blodgett testified.

Lyft’s Earnings Gaffe Draws Investor Suit Over 46-Minute ‘Fraud’

On Tuesday, an investor filed a proposed class-action securities suit over the typo in a Feb. 13 company press release that caused the stock to briefly surge 67% in after-hours trading.

The complaint filed in San Francisco federal court alleges the ride-share company defrauded investors when it mistakenly said it expected adjusted earnings margins, calculated as a percentage of bookings, to expand by 500 basis points — when it was actually 50 basis points.

The gaffe was corrected within an hour and attributed to a “clerical error,” but shareholder Yuan Chen claims he bought 20,000 shares during the 46 minutes that the stock traded at “artificially inflated” prices.

Anonymous Accountant Challenges Structure of US Audit Regulator

An unnamed Tennessee-based accountant is suing the US audit regulator, arguing its actions against him are an unconstitutional overreach.

The Public Company Accounting Oversight Board “is not a ‘court’ ordained and established by Congress,” the accountant said in a complaint filed Tuesday in the US District Court for the Middle District of Tennessee. “Congress ordained and established the Board as a private corporation.” It therefore doesn’t have the power to prosecute him, the John Doe says.

Fraudulent Bankruptcy Filings Reveal Court System’s Loophole

Even the brief existence of such fake filings can trigger computer-driven court filing scrapers, leaving incorrect impressions on court watchers including Bloomberg News. Both of Johnson’s filings showed up outside of stock market hours, but NerdWallet’s shares still fell for a time when trading opened on Monday.

“It’s straight-up a bankruptcy crime,” said Shelley Chapman, a retired bankruptcy judge who helped oversee the Lehman Brothers Holdings bankruptcy. “People ought to have access to the dockets. But you draw the line at damaging someone’s business.”

Ericsson Names New Compliance Chief

Ericsson has tapped its investigations team leader to be its new chief compliance officer, as the Swedish telecommunications-equipment company continues to serve a probation period imposed by the U.S. Justice Department after it breached an earlier settlement over bribery violations.

Rebecca Rohr, an American who currently serves as Ericsson’s head of corporate and government investigations, has been appointed compliance chief, bringing both its investigations and compliance teams under a single leader, the company said on Tuesday.