Supreme Court Issues Two New SEC-Related Opinions (No, Not THAT One)

Two New SCOTUS Opinions Securities Practitioners Should Read

Although the flurry of Supreme Court opinions issued last Thursday and Friday did not include the one most anticipated by securities practitioners (i.e., SEC v. Jarkesy), decisions involving two other agencies could have significant ramifications for the Securities and Exchange Commission. One of them could further insulate legacy SEC disclosure rules from First Amendment challenges, while the other threatens an eventual end to the agency’s historical practice of routinely demanding (and usually getting) statutory injunctions in every enforcement case it prosecutes in federal court.

Hedge Fund Talent Schools Are Looking for the Perfect Trader

Today he’s enjoying the fruits of that epiphany. The duo went ahead and constructed one of the hedge fund industry’s first assembly lines of top talent — in Cohen’s words by taking people you’d rank as a “nine” and making them perfect 10s. The result is a conveyor belt of polished high-performers who’ve helped him rebuild after a costly insider-trading scandal and to emerge on the other side with an empire whose coffers now boast $34 billion of client cash.

Cohen and Schwefel, who’s risen even further to become co-chief investment officer at SAC’s successor firm Point72 Asset Management, have pioneered the hedge fund boot camp, but they’re not alone. Ken Griffin’s Citadel, Chicago’s Balyasny Asset Management and other industry giants have devised grueling training regimes, too. The trick is to perform a kind of human-resources alchemy: turning the base metal of promising analysts into the gold of portfolio managers who might bring you $50 million to $100 million in yearly profit.

Auditors Pan Bid to Report Their Own Financials as Too Rigid

US accounting firms want more flexible rules for how they disclose details about their own finances, operations, and audit performance, calling proposals to expand mandatory reporting too rigid and costly.

Firms want to continue reporting details about major changes in their business and their financial results as part of routine audit inspections to ensure sensitive or competitive details remain confidential, according to comment letters submitted to the Public Company Accounting Oversight Board over the past month.

Details about how firms manage and staff audits of corporate accounting should continue to be discussed in voluntary transparency reports, rather than a standardized form, they said.

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Draft rules the PCAOB introduced in April would require firms to submit formal financial statements to the regulator and provide more details about their ownership and governance, plus material changes in their business. A related proposal would require firms to publicly report specific metrics that investors and corporate directors could use to compare firms based on the quality of their audits.

Binance Fined $2.2M by India’s Financial Intelligence Unit

Binance, the world’s largest cryptocurrency exchange, has been fined approximately $2.2 million (18.82 crore INR) for providing services to Indian clients without adhering to the nation’s anti-money laundering rules, India’s anti-money laundering unit announced Thursday.

Binance and several other offshore cryptocurrency exchanges were issued showcause notices by Indian authorities and subsequently removed from India for “operating illegally” in January 2024.

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Pivot to AI

Ah yes! Nvidia lulled its shareholders into believing that it was mostly a gaming company, so they bought its stock because they were optimistic about gaming, but really it was mostly a crypto company, and when the crypto market suffered setbacks in 2018 those shareholders lost money. And nothing else happened after that.

No, I’m kidding, Nvidia’s stock is up more than 1,700% since 2018, and the drop in November 2018 is barely visible on a chart. I suppose one day we will have to discuss the legal arguments in this lawsuit, but part of me thinks that the Supreme Court should dismiss it on the grounds of “you are Nvidia shareholders, come on, you’re fine.”