SEC Trial Unit Busy as Terraform Labs, Panuwat "Shadow Insider Trading" Trials Begin

SEC Insider-Trading Trial Targets Exec Who Bought Rival’s Stock

Panuwat’s attorney, Jack DiCanio, told jurors that the SEC won’t call any witnesses who have first-hand knowledge of why Panuwat made the trades that he did. DiCanio said Panuwat simply traded Incyte options because he believed they were undervalued.

“The evidence will show that the entire SEC case is an attempt to put thoughts in Mr. Panuwat’s head that were not there when he made the trades,” DiCanio said.

DiCanio also argued that the trades weren’t based on confidential information because the merger had been covered publicly by the press. And the SEC can’t prove that Panuwat had an intent to defraud because he didn’t know it was illegal to trade in a company that wasn’t his employer and that didn’t conduct business with his employer.

SEC Says Terraform Labs and Its Founder Built ‘House of Cards’ as Civil Fraud Trial Opens

[SEC trial counsel Devon] Staren said that in Terraform’s first fraud scheme, the company falsely claimed that the Terra blockchain was being used for real-world transactions on the South Korean payment app Chai.

“The evidence will show that Do Kwon led the development of the Chai payment system … [and] knew that Korean customers and merchants were using Korean won, not crypto,”

Staren said. Staren said that Kwon and his colleagues faked transactions on the blockchain “to back up their lies” and make it appear that crypto assets had been used instead of won.

In the second scheme, Staren said the defendants presented the opportunity to buy UST, a stablecoin pegged to the U.S. dollar, as “risk-free” while hiding what was happening behind the scenes.

“The evidence will show that the defendants lied again to make investors think that UST was stable and self healing,” Staren said.

Professor Roberta Karmel, Who Broke Barriers on Wall Street and in Washington, D.C., Dies at 86

Professor Roberta Karmel, a longtime educator and leading authority in domestic and international securities regulations who served as the first female commissioner of the U.S. Securities and Exchange Commission (SEC) among other distinguished accomplishments in public service, academia, and legal practice, died on Saturday, March 23. She was 86.

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Throughout her professional career, Karmel made a significant impact in areas where few female attorneys had previously ventured and took pride in laying the groundwork for the generations of women who followed. In 1972, she joined the top Wall Street law firm Rogers & Wells (now Clifford Chance) and became one of its first female partners. This achievement came despite the sexism in that era, with one law firm higher-up telling her, “While we are ready for female associates, we’re not ready for a female partner,” a memory shared in a profile of Karmel in the 2022 Brooklyn Law Notes.

Whether or not the legal industry was ready for a woman in certain roles proved immaterial to Karmel, who had joined the SEC right out of law school as one of the few women on staff. She was later the first woman nominated to the role of SEC commissioner by President Jimmy Carter and, after being confirmed, made history when she joined the leadership at the agency from 1977 through 1980.

US SEC seeks $2 billion from Ripple Labs, chief legal officer says

The U.S. Securities and Exchange Commission is seeking fines and penalties totaling $2 billion in its case against Ripple Labs over sales of the cryptocurrency XRP, the company’s chief legal officer said in a social media post on Monday.

In posts on X, Ripple Chief Legal Officer Stuart Alderoty said the regulator has asked U.S. District Judge Analisa Torres in Manhattan for the penalties in court papers filed under seal. The SEC was scheduled to file the documents publicly with redactions on Tuesday.

EV Company Hit With SPAC-Related Securities Suit

SPACs were back in the business headlines again last Friday, as the news circulated that shareholders of Digital World Acquisition Corp., a special purpose acquisition company, had approved the proposed business combination with Trump Media & Technology Group, the corporate parent of Truth Social, Donald Trump’s social media company. On the same day, in a reminder of what has happened to all too many companies that merged with SPACs during the peak of the SPAC frenzy in 2020 and 2021, shareholders of a SPAC that merged with an electric vehicle company sued the directors and officers of the SPAC as well as the EV company, alleging that in the merger proxy statement the defendants failed to disclose multiple business problems at the target company. The lawsuit is the latest SPAC-related securities suit to be filed after the collapse of the SPAC surge.

FTX customers in line for higher payouts as crypto prices soar

FTX is on track to repay its customers up to two-fifths more than the initial value of their claims as administrators for the collapsed exchange capitalise on surging prices of cryptocurrency and artificial intelligence assets.

Customers are likely to be repaid as much as 120-140 per cent of what their assets were worth on the day of FTX’s bankruptcy, according to two people with knowledge of the restructuring negotiations, owing to the rising value of assets such as bitcoin and its stake in AI start-up Anthropic.

The repayments to more than 100,000 creditors have become a critical plank for lawyers defending former FTX chief executive Sam Bankman-Fried ahead of his sentencing in the US this week.