SolarWinds: SEC Not Authorized to be a "Roving Cybersecurity Commissioner"

SolarWinds Seeks Dismissal of ‘Unfounded’ SEC Cybersecurity Suit

The public company and Chief Information Security Officer Tim Brown, which the SEC named as defendants, are pursuing a rare challenge to the agency’s first-of-its-kind enforcement action, which alleges securities fraud and controls violations. The defendants claim the SEC’s action, if successful, would broaden the agency’s powers and heighten the requirements for publicly disclosing an organization’s cybersecurity posture.

“SolarWinds made proper, accurate disclosures both before and after the unprecedented SUNBURST cyberattack, which is why this case should be dismissed,” said Serrin Turner, a Latham & Watkins LLP partner representing SolarWinds in the case, in a statement to Bloomberg Law. “The SEC is trying to move the goalposts and force companies to disclose internal details about their cybersecurity programs, which would be both impractical and dangerous.”

Feds Warn Companies Not to Delete Slack, Signal Chats

Use Slack or Signal for work? Don’t delete your chat history. The Federal Trade Commission and Department of Justice said Friday that companies under investigation will have to turn over these messages or face potential civil penalties and criminal obstruction charges.

“These updates to our legal process will ensure that neither opposing counsel nor their clients can feign ignorance when their clients or companies choose to conduct business through ephemeral messages,” Manish Kumar, deputy assistant attorney general at the DOJ’s antitrust division, said in a statement.

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“The U.S. Securities and Exchange Commission has also started to penalize companies that take a lax approach to preserving employee chat histories. The agency has fined more than 40 firms $2.7 billion for conducting business off-channel, including via WhatsApp.

Insider Trader Who Made $1 Million on Merck-Pandion Deal Gets Five Months

A man who made more than a $1 million insider trading on confidential information about Merck & Co.’s 2021 acquisition of Pandion Therapeutics was ordered to spend five months behind bars.

Brandon Wong was sentenced Friday by US District Judge Edgardo Ramos in Manhattan. Wong pleaded guilty in April to insider trading based on deal information that his friend Seth Markin, then a Federal Bureau of Investigation trainee, stole off the computer of his girlfriend, a corporate lawyer.

Prosecutors had sought a sentence of around 30 months in prison for Wong, citing the amount he made trading Pandion stock. He used some of it to buy Rolex watches for himself and Markin, take a trip to Hawaii, enjoy a $2,000 dinner at Chef’s Table at Brooklyn Fare, make a $100,000 payment on a Florida home and rent a McLaren 720 sports car.

Crypto may have become boring, but it still isn’t legit

No, all that happened is that crypto has gone from being an exciting and rebellious alternative to traditional finance, a way of “being your own bank”, to simply providing a means for regular investors to diversify their portfolios and for asset managers to eke out a bit of extra revenue.

Crypto in 2024 is, in other words, rather boring. But boring does not equal legitimate, as SEC chair Gary Gensler himself pointed out when the announcement was made. The commission’s approval of the bitcoin ETFs was not an endorsement of bitcoin or crypto more widely, but rather the result of a court ruling that found the SEC’s long-standing opposition to bitcoin ETFs — on the grounds they could be subject to fraud and manipulation — was arbitrary.

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The truth is that, whether the crypto is encased in a nice regulated wrapper and sold to you by BlackRock, or whether you buy it from a pastor who says that the Lord told him to make the sale, there is still no there there. So while it might be more difficult these days, I will continue doing what I consider to be God’s real work: taking the mickey out of it.

ESG liability for companies and directors: a shifting landscape

Since the United Nations Global Compact in 2004 first coined the phrase, “environmental, social, and governance” — or “ESG” — has changed the way we think about investing. ESG-related investments have grown 42 percent from 2018 to 2020, and, as of late 2021, “one of every three dollars of assets under management is invested in ESG strategies,” according to Nasdaq.com.

Yet, as investments and interest in ESG grow, so too do regulations related to ESG disclosures and shareholder interest in pursuing ESG-related lawsuits. This shift may well create increased liability on both an individual and company level.

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In the event that the SEC passes its proposed rules in relation to ESG disclosure, directors and entities alike will have one more reason to approach ESG-related issues with care. But even now, parties are facing an uptick in SEC enforcement investigations and actions, new policies in California, international disclosure rules, whistleblower claims, and shareholder actions. This is all framed by heightened focus on ESG concerns more broadly. Companies and their directors should exercise caution when evaluating their ESG disclosures and ESG-related conduct.

ETF That Shorts Stock Picks From CNBC’s Jim Cramer Is Shutting Down

Jim Cramer has spent about four decades on Wall Street in a career that has taken him from hedge-fund manager to host of CNBC’s Mad Money show. The ETFs he inspired have proved a lot less durable.

The Inverse Cramer Tracker ETF (ticker SJIM), a fund that aimed to short stocks recommended by the bombastic TV personality, is poised to join its bullish sibling on the ETF scrapheap, it was announced Thursday. SJIM will stop trading Feb. 13, according to a press release. The product has managed to attract just $2.4 million in assets since its launch in March 2023.

Grifols Sues Over Gotham City Short-Seller Report

Grifols SA sued Gotham City Research over a report alleging the company has overstated profit and misstated its accounting.

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The complaint filed in federal court in New York on Friday says Gotham City and its principals are “predatory short sellers” who illicitly profit from “rigged short-and-distort schemes.”

“Unlike other short sellers, defendants crossed the line with their attack on Grifols by knowingly making false and misleading statements in furtherance of a single illegal purpose: to manipulate the value of Grifols’ stock for their own monetary gain,” Grifols said in its suit.