Theranos New Trial Efforts Take a Hit

Balwani Denied Request to Join Bid by Holmes for a New Trial

A federal judge rejected a request by former Theranos Inc. President Ramesh “Sunny” Balwani to join an attempt by the company’s founder and former chief executive officer Elizabeth Holmes to win a new trial.

— Balwani wanted to join an Oct. 17 hearing where a former Theranos lab director will be questioned about the veracity of his testimony at trial.

— US District Judge Edward Davila ruled Wednesday that none of the statements by the director, Adam Rosendorff, pertain to Balwani’s trial.

— Rosendorff “unequivocally stands by his testimony at Mr. Balwani’s trial,” Davila said in his ruling…

Elizabeth Holmes’s Ex-Colleague Disputes Account in Her Bid for New Trial

Lawyers for Adam Rosendorff, the former Theranos Inc. lab director who testified against founder Elizabeth Holmes in her criminal-fraud trial, asked a judge Wednesday to reject a subpoena from Ms. Holmes as she seeks a new trial.

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Last month, Ms. Holmes asked a federal judge for a new trial, citing a visit to her California home by Dr. Rosendorff, in which he allegedly expressed regret for his role in her prosecution, according to a court filing.

Dr. Rosendorff’s lawyers dispute that account, saying in the filing Wednesday that he doesn’t recall making those statements and that they don’t accurately reflect how he felt then or now.

“He wanted to be able to forgive her for the pain and suffering her actions have caused in his life,” his lawyers wrote in the filing. “He wanted to be able to express his condolences that her child may grow up without a mother” if Ms. Holmes receives a lengthy prison sentence, they wrote….

SEC’s Peirce Calls for Crypto Legislation to Guide Regulation

Congressional efforts to regulate cryptocurrency have come at a “good time” for the SEC, which has relied on existing securities laws to police digital coins, agency Commissioner Hester Peirce said Wednesday.

Crypto requires different rules than traditional securities, the Republican said. Lawmakers have been working on several bipartisan bills that would regulate digital assets, as crypto industry members have clamored for more regulatory clarity from the Securities and Exchange Commission and the Commodity Futures Trading Commission….

FASB Settles on Fair-Value Accounting for Measuring Crypto Assets

The Financial Accounting Standards Board on Wednesday said companies should use fair-value accounting for measuring bitcoin and other crypto assets, moving a step closer to a standard that could clear up uncertainty over reporting how much such holdings are worth.

There are currently no specific accounting or disclosure rules for cryptocurrency assets, so businesses classify them as indefinite-lived intangible assets similar to intellectual property such as trademarks. Companies must review the value of such assets at least once a year and write it down if it drops below the purchase price. If the value rises, companies can only record a gain when they sell the asset, not if they continue holding it.

Companies and accountants want the FASB to adopt fair-value accounting instead, which would allow them to recognize losses and gains immediately and treat digital assets as financial assets.

Oh Elon

Well, look, it is a weird feature of US securities law that shareholders regularly sue companies for misleading them, and those companies regularly settle those lawsuits, and the companies pay money to the shareholders, but the money comes from the shareholders. The money belongs to the shareholders, so paying it out as damages seems counterproductive. I suppose there are some differences. (If you owned shares at the time of the fraud, and you don’t now, you get some money at the expense of the current shareholders. Plus insurers probably pay some of it.) Still it is going to be very funny if Musk ends up buying Twitter, sues it for misleading him into buying it, wins and pays himself damages.

Cryptocurrency Market Hackers Set for Record Year After Looting Over $3 Billion

Cryptocurrencies may have crashed this year but they remain a digital cash-machine for one potent constituency: hackers.

At least $718 million has been stolen so far in October alone, taking the gross tally for the year past $3 billion and putting 2022 on course to be a record for the total value hacked, according to blockchain specialist Chainalysis Inc.

Most of the targets are so-called decentralized finance — or DeFi — protocols, which deploy software-based algorithms to enable crypto investors to trade, borrow and lend on digital ledgers without using a central intermediary.

Robo-Adviser Betterment Launches Cryptocurrency Offering

The largest independent robo-adviser, Betterment, is letting its clients invest in a handful of crypto portfolios for the first time but with a caveat: Best not to go above 5% exposure.

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Over 730,000 retail customers can now invest in four curated portfolios of crypto assets covering everything from broad market themes to decentralized finance (DeFi) tokens, with metaverse plays and sustainability in between. They’re constructed for ease of access, Jesse Proudman, vice-president of crypto investing at Betterment, told CoinDesk.

Crypto Advocacy Group Sues U.S. Treasury Over Tornado Cash Sanctions

A cryptocurrency research and advocacy group has filed a lawsuit challenging the U.S. Treasury Department’s sanctions against cryptocurrency mixer Tornado Cash.

Coin Center, a Washington, D.C.-based crypto-focused think-tank, along with three individuals, filed suit against the Treasury Department Wednesday in federal court in the Northern District of Florida, asking it to remove Tornado Cash from the sanctions list.

The suit argues that Treasury’s Office of Foreign Assets Control, which enforces U.S. sanctions, doesn’t have statutory authority to impose sanctions on Tornado Cash, a platform based on open-source, self-running software protocols, and that the action against it infringes on Americans’ right to privacy and on their rights under the First Amendment of the U.S. Constitution.

Payments Company Hit With Data Breach-Related Securities Suit

The payment technology firm Block, Inc. (formerly known as Square) has been hit with a securities class action lawsuit related to the company’s announcement earlier this year that a former employee had improperly accessed and downloaded company customer data. The new lawsuit is the latest example of the ways in which data security incidents can translate into D&O claims.