SEC Sues CEO, President for Insider Trading Despite 10b5-1 Plan

SEC Charges Cheetah Mobile’s CEO and its Former President with Insider Trading

The Securities and Exchange Commission today charged the CEO of Cheetah Mobile Inc. and the company’s former President with insider trading for selling Cheetah Mobile’s securities, pursuant to a purported 10b5-1 trading plan, while in possession of material nonpublic information. The SEC’s order finds that Sheng Fu, the company’s CEO, and Ming Xu, its then-President and Chief Technology Officer, jointly established a purported 10b5-1 trading plan after becoming aware of a significant drop-off in advertising revenues from the company’s largest advertising partner.

According to the SEC’s order, in 2016, Sheng Fu and Ming Xu sold 96,000 Cheetah Mobile American Depository Shares under the trading plan and avoided losses of approximately $203,290 and $100,127, respectively. Cheetah Mobile is based in China and offers various technology products, including mobile games and other applications.

Crypto Lawyers Bet Big on Class Action Lawsuits as Market Slides

As the Biden administration ramps up its scrutiny of the cryptocurrency industry, a handful of small litigation shops are piling up class actions against crypto exchanges and digital token issuers, pursuing theories that could shape how decades-old laws apply to the emerging field.

Led by partners from boutique firms, lawyers have filed 58 securities class actions against crypto companies since 2016, according to a report from the consulting firm Cornerstone Research and Stanford Law School.

More than one-third landed in the past two years, and the pace surged in the first six months of 2022, when the industry’s market capitalization fell by $2 trillion before stabilizing.

‘Dilbert’ Becomes the Voice of the ESG Opponents: Green Insight

Even the creator of the “Dilbert” cartoon is taking potshots at an investment strategy that focuses on risks tied to the environment, social and corporate governance. In a series of illustrations published last week, author Scott Adams criticized ESG, comparing it to a “colicky” baby with “firehouse diarrhea.”

Adams is known for his strong opinions, and his position on ESG matches the political rhetoric coming from the governors of Florida and Texas, as well as other Republican leaders. They say they want to obliterate the investment philosophy from the American corporate landscape. Adams is onboard: In a YouTube video that aired last week, he said, “I am going to destroy ESG,” or at least “take a shot at it.”

Stablecoin Issuer Tether Ordered to Produce Documents Showing Backing of USDT

Tether has been ordered by a U.S. Judge in New York to produce financial records relating to the backing of USDT as part of a lawsuit that alleges Tether conspired to issue USDT as part of a campaign to inflate the price of bitcoin.

The order requires Tether to produce “general ledgers, balance sheets, income statements, cash-flow statements, and profit and loss statements”, as well as records of any trades or transfers of cryptocurrency or other stablecoins by Tether including information about the timing of the trades.

It also orders Tether to share details about the accounts it holds at Bitfinex, Poloniex, and Bittrex.

While attorneys representing Tether moved to block the order to release, calling it “incredibly overboard” and “unduly burdensome”, the presiding judge disagreed, writing that the “documents Plaintiffs seek are undoubtedly important.”

Chamath Palihapitiya, a ‘SPAC King,’ Will Wind Down Two Funds

Over the past three years, Chamath Palihapitiya refashioned himself from venture capitalist to mogul in the world of special purpose acquisition companies, or SPACS, the once-obscure financial vehicles also known as blank-check funds that rocketed in popularity — and stock market value — during the pandemic.

Mr. Palihapitiya is now making a partial retreat.

The investor announced on his blog on Tuesday that his firm, Social Capital, was winding down two of the SPACs it had co-created, and would return the money they had raised to investors. Together, the two funds oversee roughly $1.6 billion.

The announcement by Mr. Palihapitiya, the financier once known as the “SPAC king,” is the latest sign of how far out of love Wall Street has fallen with blank-check funds.

House Stablecoin Bill Would Put Two-Year Ban on Terra-Like Coins

Legislation to regulate stablecoins that’s being drafted in the House would place a two-year ban on coins similar to TerraUSD, the algorithmic stablecoin that collapsed earlier this year.

Under the latest version of the bill, it would be illegal to issue or create new “endogenously collateralized stablecoins,” according to a copy obtained by Bloomberg. The definition would kick in for stablecoins marketed as being able to be converted, redeemed or repurchased for a fixed amount of monetary value, and that rely solely on the value of another digital asset from the same creator to maintain their fixed price.