Second Circuit Reverses Judgment Against Former Apollo Partner for Fraudulent Expenses

Ex-Apollo Partner Gets SEC Fraud Judgment Thrown Out on Appeal

Mohammed Ali Rashid was found liable in 2020 of submitting $290,000 in fraudulent expenses to Apollo funds, getting them to pay for items including trips to Brazil and Hawaii, salon hair cuts, spa treatments and dinners at high-end Manhattan restaurants.

The federal appeals court in Manhattan on Wednesday said he clearly committed fraud but overturned the earlier ruling, saying that the SEC failed to prove he knew the phony expenses would be charged to the Apollo funds, rather than to the firm itself. That distinction was fatal to the regulator’s suit because it was filed under a federal law that protects the clients of investment advisers, the appellate judges said in a 2-1 ruling.

Unless the SEC can get that decision reversed, possibly by the US Supreme Court, the agency will be more restricted in its use of the law, the Investment Advisers Act, in civil enforcement actions going forward.

Sierra Club sues SEC over new climate risks-reporting rule

A leading environmental group is suing the Securities and Exchange Commission over a new rule mandating companies disclose their environmental-related risks, arguing it does not go far enough to protect investors.

The rule was finalized March 6 ordering publicly traded companies to reveal climate-related risks “that have had or are reasonably likely to have a material impact on” on their business.

But the Sierra Club and the Sierra Club Foundation filed a lawsuit Wednesday stating the rule falls short of the SEC’s mandate to protect investors.

Announcing the Debevoise Tracker for Cybersecurity Incident Disclosure on Form 8-K

In July, we previewed the new rules adopted by the Securities and Exchange Commission (“SEC”) for Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure. Under these rules, Item 1.05 of Form 8-K requires U.S. public companies to disclose material cybersecurity incidents. We have been tracking Form 8-K filings under the new SEC requirements since the rules went into effect on December 18, 2023. In this chart, you can find links to each of these filings, as well as the relevant dates and amendments (if any), updated as of March 12, 2024. We will periodically update the Debevoise Data Blog to reflect new Form 8-K filings under Item 1.05.

Tesla Investors Write to Judge Who Voided Elon Musk Record Pay

The judge who threw out Tesla Inc. co-founder Elon Musk’s record-setting $55.8 billion pay package said she’s received “many communications” from investors about the request from the winning lawyers for almost $6 billion in company stock.

Delaware Chancery Court Chief Judge Kathaleen St. J. McCormick said she’s not reading the letters. The state judiciary’s ethics code “prohibits me from considering” the letters from non-parties in the litigation “who claim to hold stock in Tesla,” she wrote to lawyers on both sides. She asked the attorneys to recommend a process for handling the letters.

Binance Employees to Remain in Custody in Nigeria

Two Binance employees under custody in Nigeria over a spat between the government and the company will remain under detention at least through March 20 following a court decision, their families said.

Nigeria detained Tigran Gambaryan, an American, and Nadeem Anjarwalla, a U.K. and Kenyan national, on Feb. 26 after the country’s government accused Binance, the world’s largest crypto exchange, of crashing its currency, the naira. The government had invited the two for meetings with officials and regulators. Neither has been charged with any crimes, nor have they been told why they were detained.

Gambaryan is Binance’s head of financial-crime compliance. Anjarwalla is Binance’s regional manager for Africa.

”Ask a Recruiter”: The 5 Types of Securities-Related Partners Big Law is Looking to Add in 2024

The good news: We’re seeing a significant uptick this year in the number of partners Big Law is bringing on. Macrae’s market analysis indicates that in January and February, Am Law 50 firms added 20% more partners across the largest legal markets than in the first two months of last year. In particular, New York saw a spike of 40% and D.C. was up 26%. (You’ll find more detail on this trend here.) Our law firm clients are expressing interest in lawyers with government experience across a breadth of specialties.

The better news (for some of you): There are clear standouts when it comes to the most in-demand expertise in the current market. If one of the following five descriptions fits you, you’re more likely than others to find yourself in demand should you enter the job market:

1. Current SEC lawyer with asset management experience, both on the enforcement side and the regulatory compliance side. Are you a private funds expert? Even better – the hottest of the hot. (Call me!) .…