The Six Founding Members of "The Shadow SEC"

Plus the SEC charges Becton Dickinson with misleading investors about Alaris Infusion Pump and overstating income.

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Kurt Wolfe, a member of Securities Docket’s 2024 Advisory Board 😀, has been elected as a parter at Quinn Emanuel.

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Becton Dickinson to Pay $175 Million for Misleading Investors About Alaris Infusion Pump

The Securities and Exchange Commission today announced settled charges against Becton, Dickinson and Company, a New Jersey-based medical device manufacturer known as BD, for repeatedly misleading investors about risks associated with its continued sales of its Alaris infusion pump and for overstating its income by failing to record the costs of fixing multiple software flaws with the pump. BD agreed to pay a $175 million civil penalty.

According to the SEC’s order, BD determined in 2016 that software changes made to the Alaris pump required regulatory clearance from the Food and Drug Administration (FDA). However, BD did not have the data required for clearance, and generating the data would delay the release of new features, so BD continued selling the pump without clearance. By January 2019, BD identified more than 25 flaws in the pump’s software that its experts categorized as presenting risks of the greatest potential harm to patients. Rather than inform investors that these issues heightened the risk that the FDA would limit BD’s ability to continue selling Alaris—a product whose sales contributed about 10 percent of BD’s profits—BD made misleading statements in its periodic reports about its regulatory risks.

by SEC Press Release

👉 The SEC Order is here.

Announcement of the Formation of The Shadow SEC

We today announce the formation of The Shadow SEC, an independent organization of six current academics that, like the earlier established Federal Reserve Shadow Open Market Committee, is intended to provide, encourage, facilitate, and distribute policy discussions and debates relating to the federal securities laws and the Securities and Exchange Commission (SEC). The Shadow SEC has no political affiliation and will not accept funding from any person or organization with an interest in potential statutory changes, proposed or adopted SEC rules, forms, regulations, cases, or administrative proceedings involving federal securities law. Members may receive customary back up support from their employing universities.

Our founding members are listed below, and a very short bio is attached for each: John Coates, John C. Coffee, Jr., James Cox, Jill Fisch, Merritt Fox, Joel Seligman.

by CLS Blue Sky Blog

👉 First of all, I did not know that you could get together with your colleagues and create a Shadow SEC. Had I known, I would have done this years ago.

Second, if anyone else wants to get in the game and create your own competing Shadow SEC, I see that TheShadowSEC.com is still available!

How Trump Can Help Crypto on Day One

You can issue an Executive Order on January 20 directing all federal agencies to:

1. Immediately stay all investigations, enforcement actions and prosecutions of crypto companies, projects and founders unless they involve credible allegations of (a) acts of fraud or other intentional misconduct that harms investors or other victims, or (b) conduct that threatens our national security.

2. Provide a written report to the Office of the President within 180 days detailing why the relevant agency should not immediately terminate such proceedings.

3. Promptly terminate all investigations, enforcement actions, or prosecutions of crypto companies, projects or founders that do not warrant continued prosecution.

by CoinDesk

Ex-SEC Lawyers Agree: Crypto Enforcement Shackles May Take Time to Resolve

After years of legal wrangling with the U.S. securities regulator, President-elect Donald Trump’s win was taken by the crypto industry as a definitive sign that their courtroom fights and enforcement pressures would be cast away when he takes the oath of office again.

But shedding the enforcement legacy of Securities and Exchange Commission Chair Gary Gensler is not quite that simple, according to former agency officials and lawyers interviewed by CoinDesk, some of whom now represent crypto clients.

by CoinDesk

Carlos Watson, Ozy Media Co-Founder, Is Sentenced to Almost 10 Years in Prison

Carlos Watson, a co-founder of the now-defunct digital media company Ozy Media, was sentenced on Monday to almost 10 years in prison for trying to defraud investors and lenders by lying about the company’s finances.

The sentence came five months after a federal jury convicted Mr. Watson and Ozy Media of conspiracy to commit securities and wire fraud. The jury also convicted Mr. Watson of identity theft, following a two-month trial during which witnesses detailed an impersonated phone call, fabricated contracts and misleading claims about Ozy’s earnings from 2018 to 2021.

by NYT

Bitcoin at $100,000 Lures Long-Time Crypto Holdouts Encouraged by Trump Win

For more than a decade, they balked at the idea of buying crypto.

Some didn’t know how to get started. Others saw FTX collapse two years ago and chalked it all up to a scam. But then Donald Trump won the presidency and his crypto-friendly campaign promises sent Bitcoin soaring north of $100,000 — a number impossible to ignore.

“I’ve been wary of crypto my whole life,” said Ian Johnson, a 28-year-old living in Sioux Falls, South Dakota, who recently bought Bitcoin for the first time. “I just want to see what it does. If Trump does a good job, I feel like it’s going to spike like crazy.”

by Bloomberg

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Securities Enforcement Forum New York 2025 is set for January 28, 2025 at the JW Marriott Essex House New York! Join us in person or tune in virtually to hear from nearly 50 luminaries in the securities enforcement field.

Panelists will include eight senior officials from the SEC’s New York office and the SDNY, featuring Keynote speakers Sanjay Wadhwa and Antonia Apps. Panelists will also include six former SEC Enforcement Directors (Gurbir Grewal, Steve Peikin, Stephanie Avakian, Andrew Ceresney, George Canellos, and Bill McLucas) as well as 30+ other leading attorneys, in-house counsel, and consultants in the securities enforcement field. In short, you will not want to miss this inaugural event in New York!

👉 Daily Update readers can register here with a 25% discount by using one of these codes. See you January 28 in New York!!!

In-Person: BLAST212NY25

Virtual: BLAST212V25

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