SEC Seeks En Banc Review to Remove "Cloud of Uncertainty" Over ALJs

SEC Seeks Review of Ruling That Cast ‘Cloud’ Over Enforcement

The Securities and Exchange Commission asked the full Fifth Circuit to review a decision finding the agency’s administrative proceedings unconstitutional, arguing the ruling created uncertainty over federal agencies’ use of in-house judges to hear cases.

In May, a divided panel for the US Court of Appeals for the Fifth Circuit vacated a SEC decision that hedge-fund manager George Jarkesy Jr. committed securities fraud. The panel found, in part, that restrictions on removing SEC administrative law judges only for cause violated the separation of powers.

Ethics Watchdog Bars US Government Employees From Writing Crypto Policy if Invested

U.S. officials who are personally invested in cryptocurrencies are now disqualified from working on crypto-related policy and regulation that could affect the value of their assets.

A legal advisory notice issued by the U.S. Office of Government Ethics (OGE) on Tuesday declared that the de minimis exemption – which, when applied to a security, would allow the owner of an amount below a certain threshold to work on policy related to that security – doesn’t apply to any cryptocurrency or stablecoin, even if the cryptocurrencies in question “constitute securities for purposes of the federal or state securities laws.”

Gary Gensler’s Bitcoin Regulation Grab

The SEC has told spot ETP sponsors they must demonstrate that a significant amount of bitcoin trading occurs on a regulated market or that the underlying market “inherently possesses a unique resistance to manipulation beyond the protections that are utilized by traditional commodity or securities markets” (our emphasis).

Mr. Gensler knows the first criterion can’t be met because bitcoin trading largely occurs on crypto exchanges, which he wants to regulate but doesn’t have express legislative authority over. As for the second, the SEC has arbitrarily established a higher standard for approving spot bitcoin ETPs than for other commodities but hasn’t explained how to satisfy it.

Motion to Dismiss Granted in SPAC-Related Securities Suit Against Gaming Company

As readers of this blog know, as a follow-on effect to the massive wave of SPAC activity in the U.S., there has also been a surge of securities class action lawsuits involving companies that engaged in SPAC transactions. Many of these suits have only just been filed, so it is too early to tell how they will fare. But some of the cases are now reaching the motion to dismiss stage. If the recent motion to dismiss ruling in the SPAC-related lawsuit against mobile gaming technology company Skillz is any indication, many of these cases could encounter substantial hurdles as they go forward.

‘Crypto: The Musical’ Aims for Broadway

Crypto has already established a foothold on Wall Street – but what about the Big Apple’s most famous avenue? If Amanda Cassatt has her way, “Crypto: The Musical” could be the next show to hit Broadway.

The musical – still in the very early stages of development – will tell the story of Zoe, a woman who leaves her corporate job to join a crypto startup, “and the many absurdities, heartbreaks and triumphs she experiences along the way.”