SEC's Grewal: Conscious Effort to Ensure Penalties Have Deterrent Effect is Working

SEC Top Enforcer Says Tougher Penalties Are Working

Under Gurbir Grewal, director of the SEC’s enforcement division, the agency has brought a record number of actions. In the year ended Sept. 30, the SEC imposed financial remedies of about $5 billion through 784 enforcement actions, second only to the record set the year before at $6.44 billion in monetary penalties.

“That was a conscious effort over the last two years to make sure the penalties we were seeking were having that deterrent effect” that was more than the cost of doing business, Grewal told The Wall Street Journal.

Moving forward, the SEC is recalibrating penalties to identify and reward cooperation and remediation, Grewal said.

Bankman-Fried Won’t Face Second Trial on Remaining Charges

Fallen cryptocurrency king Sam Bankman-Fried won’t face a second trial on additional charges after the co-founder of FTX was convicted of a massive fraud last month, prosecutors told a judge.

The government told US District Judge Lewis Kaplan in a letter Friday that in the interest of expediency it would drop plans to try Bankman-Fried for conspiracy to bribe foreign officials, commit bank fraud and operate an unlicensed money transmitting business, among other charges.

Bankman-Fried, 31, was found guilty of seven counts of fraud and conspiracy and faces the possibility of decades in prison.

How the US justice department became top cop in the crypto ‘Wild West’

In less than 12 months, prosecutors had won the conviction of FTX’s Sam Bankman-Fried — who faces potentially decades behind bars — and dethroned Changpeng Zhao, or CZ, the former head of Binance.

“You always get people’s attention when other executives in the industry are rolling up their sleeves to be fingerprinted,” said Widge Devaney, a former federal prosecutor now at law firm Baker McKenzie. “It is a lot more real than whether something is a security or not,” he added, referring to the SEC’s ongoing battle to get courts to define the status of various tokens.

“The DoJ has led the way in defining the boundaries of the crypto industry,” said another former senior prosecutor, who asked not to be named, “and in some respects it reflects a missed opportunity for the SEC”.

Binance’s Changpeng Zhao Again Blocked From Traveling by US Judge

Former Binance Holdings Ltd. chief executive Changpeng Zhao has been blocked again from traveling as he awaits sentencing in the US for violating banking laws.

Zhao had asked US District Judge Richard A. Jones for permission to travel while on bail, the second such request following his guilty plea in November. At a court hearing in Seattle on Friday, Jones denied Zhao’s application. The reasons for his trip, and the destination, were filed in court under seal.

SEC Presses Companies on Climate Risk With New Rules on Horizon

Securities and Exchange Commission staff who regularly review corporate filings have sent climate-related queries to more than a dozen large companies over the past three months, according to a Bloomberg Tax review of securities filings.

The regulator has pressed businesses such as Estée Lauder Companies Inc., Oracle Corp., Eli Lilly & Co., and others to divulge why their annual financial reports contain less information about climate risk than their separate sustainability reports. Commission staff are also asking companies for details about the impact of severe weather and the how climate risks affect customer demand for their goods and services as well as competition from other businesses.

Federal Court Securities Class Action Lawsuit Filings Increased in 2023

D&O insurers closely track the number of annual securities class action lawsuit filings. The number of annual filings can provide some indication of the insurers’ ultimate loss costs for the year. The current year’s filing patterns can also inform the insurers’ efforts to try to determine the profit-making price for their insurance product.

In 2023, the number of federal court securities class action lawsuits filed increased about 7% compared to 2022, although the number of federal suit filings still remained well below the elevated levels seen in the recent past. Several factors contributed to the increased number of securities suit filings during the year, including disruption in the banking sector as well as the overall impact of macroeconomic factors.

Bitcoin Price Begins 2024 Blasting Through $45K

The bitcoin (BTC) price started 2024 on a roll, adding more than 7% in 24 hours to approach $46,000, the highest level since April 2022, in a strong start to the new year.

As has been the case for the past several weeks, anticipation that the U.S. Securities and Exchange Commission (SEC) will greenlight a number of spot bitcoin ETFs appears to be the catalyst for the move higher. A Reuters report over the weekend suggested the regulatory agency could begin notifying ETF sponsors as soon as Tuesday that their applications were to be approved.