SEC's Flurry of Cases to Close Year Results in "Bonanza" for Big Law

SEC’s Busy Week Sends Wave of Work to Big Law

The Securities and Exchange Commission has seen a particularly aggressive week in enforcement actions against broker-dealers, corporate insiders and others, resulting in a bonanza of work for Big Law and boutiques lately.

Overall in September, the SEC announced settlements or charges in more than three dozen matters, and about 20 of those were in the last week.

On Friday alone, the SEC announced fines or civil charges in six separate matters. For instance, the SEC announced charging 10 firms, such as Perella Weinberg Partners and Robert W. Baird & Co., ”with widespread recordkeeping failures.” Defense counsel for those 10 firms include Nelson Mullins Riley & Scarborough; Wilmer Cutler Pickering Hale and Dorr; Skadden, Arps, Slate, Meagher & Flom; Morgan, Lewis & Bockius; and Ropes & Gray.

Ex-Goldman Trader Anthony Viggiano’s Path to Alleged Insider Trader Scheme

Salamone asked Viggiano if there are any traces of him providing information to Forlano. His friend said there wouldn’t be any evidence, because he used Signal or Xbox 360 chat.

“There’s no tracing that,” Viggiano said, according to the indictment.

Gary Gensler Explains Why SEC Is Taking Litigation-Heavy Strategy to Regulate Crypto

Congressman John Rose (R-TN) asked Gensler: “Regarding cryptocurrencies … I’m interested in why you have pursued a litigation-heavy strategy despite the fact that neither you nor any of your senior staff are litigators — neither your Chief of Staff nor your Policy Director or even your General Counsel. Why have you settled on such a litigation-heavy strategy to address the cryptocurrency market?” Gensler replied:

Frankly, it’s because the field is so rife with hucksters and fraudsters and non-compliant parties … This is a field where the American public is at risk and being harmed every day on these platforms that are commingling and often trading against their customers.

Nonetheless, the SEC chairman added: “We’ve also done rulemaking: one related to broker-dealers that was completed a number of years ago and then others related to the definition of exchange and the custody role.”

The congressman from Tennessee then told Gensler: “In my view, it seems that these cases are brought with an explicit political agenda, not a substantive legal one.” Gensler quickly refuted: “Nothing can be further from the truth. There’s nothing, the only thing political is protecting the American public.”

Is Michael Lewis Trashing His Reputation to Defend Sam Bankman-Fried?

For a writer who built a career making convoluted financial fraud dead simple to miss something so fundamental is bizarre, to say the least. Whether or not FTX brought in revenue is not being litigated, and bringing it up is to — again — miss the gigantic fraud-shaped hole in FTX’s books (and it’s an SBF talking point). It’s enough for a CoinDesk editor ask me, maybe rhetorically, whether Bankman-Fried “has something” on Lewis. There doesn’t have to be an embarrassing photo of Lewis, like, kissing a goat at a Bahamian rave, for this to be a question worth asking.

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It’s one thing to present opinion as fact — like saying FTX would be a going concern if Binance CEO Changpeng Zhao didn’t trigger a panic run, or that SBF was simply making SO MUCH MONEY he didn’t notice an $8 billion hole in the balance sheet (afterall, Bankman-Fried at least privately admitted his hedge fund Alameda Research was unprofitable and illiquid). It’s another to want to see the best in people (or believe people could be good). “There is still a Sam-Bankman-Fried-shaped hole in the world that now needs filling,” Lewis said, referring to someone willing to take risks principally to benefit the world.

Can AI Pick Stocks Better Than Wall Street? Firms Are Trying

The firm, with some $5 billion in assets under management, is one of a growing number of funds dedicated to creating the ultimate money machine—AI that can teach itself to beat the market….

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So far that hasn’t happened. The irony of investors’ piling into AI is that the technology has for years struggled to crack the actual business of investing. Machines get bamboozled by noisy markets and can be caught off guard by fickle trends, and finance—surprisingly—sometimes lacks the oceans of data that underpin the technology in other domains.

Securities Enforcement Forum Central 2023—Enforcement Trends Throughout the SEC 2022 Fiscal Year

Senior Division of Enforcement officials from various U.S. Securities and Exchange Commission (SEC) offices spoke with SEC alumni, private practitioners, and other legal professionals at the Securities Enforcement Forum Central 2023 (the Forum) in Chicago, Illinois, on September 19, 2023. In anticipation of the SEC’s 2022 fiscal year-end on September 30, panelists discussed emerging trends in SEC enforcement investigations and actions over the past year. Specifically, Regional Directors highlighted assistance provided by whistleblowers in carrying out the SEC’s oversight mission and emphasized the need to protect “main street” investors through gatekeeping and crypto enforcement actions. In addition, the Staff discussed other popular enforcement topics, including cybersecurity, financial disclosures, and insider trading.

SBF’s Defense Will Be Tough

The defense is that Bankman-Fried was incredibly naive. It not only requires you to believe that his lieutenants were stealing all the customer money without him noticing, that he made a series of innocent risk management mistakes while everyone else was building nefarious backdoors. It also requires you to believe that he believed in his stash of crypto, that he thought his vast imaginary wealth was real and his to spend. Obviously it turned out not to be.

It’s Sam Bankman-Fried’s trial. But it’s cryptocurrency’s colonoscopy.

FTX might sound, at first, like a regular business clown show rather than a crypto clown show….

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But the meltdown of FTX, at root, happened because FTX and its doomed sister hedge fund, Alameda Research, were in the crypto business. The mechanics of the companies’ collapse carry an aura of being complicated, and the more granular elements are complicated. But what happened here is pretty simple from 30,000 feet: FTX allegedly took its customers’ crypto deposits and gave them to SBF’s hedge fund, which made speculative bets with unassuming depositors’ deposits. That hedge fund invested a lot of the money in made-up crypto tokens that were not just minted by FTX, but whose value was tied directly to confidence in FTX’s continued operation and success. The paper value of those coins was not real, and not only in the sense that anyone who holds a big enough stash of any asset will need to accept a markdown if it actually wants to sell all of it. No, SBF had his customers’ money outside his crypto exchange and tied up in coins that barely traded at all….