Two Brothers Indicted for "First-of-its-Kind Manipulation of the Ethereum Blockchain"

Two Brothers Arrested For Attacking The Ethereum Blockchain And Stealing $25 Million In Cryptocurrency

U.S. Attorney Damian Williams said:

“Today, my Office indicted two brothers—Anton Peraire-Bueno and James Peraire-Bueno—for conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering, all stemming from their alleged scheme to exploit the Ethereum blockchain and to obtain about $25 million worth of cryptocurrency from it. As we allege, the defendants’ scheme calls the very integrity of the blockchain into question. The brothers, who studied computer science and math at one of the most prestigious universities in the world, allegedly used their specialized skills and education to tamper with and manipulate the protocols relied upon by millions of Ethereum users across the globe. And once they put their plan into action, their heist only took 12 seconds to complete. This alleged scheme was novel and has never before been charged. But as the Indictment makes clear, no matter how sophisticated the fraud or how new the techniques used to accomplish it, the career prosecutors of this Office will be relentless in pursuing people who attack the integrity of all financial systems.”

SEC Obtains Final Judgments Against Florida Microcap CEO and Consultant for Fraud

On May 13, 2024, the U.S. District Court for the Eastern District of New York entered final consent judgments against Erik (“Rik”) Deitsch, the former CEO of microcap issuer Nutra Pharma Corporation (“Nutra Pharma”), and Sean McManus, a consultant for Nutra Pharma, enjoining them from violating certain provisions of the federal securities laws, ordering disgorgement and civil monetary penalties, imposing penny stock bars, and as to Deitsch, imposing an officer-and-director bar.

According to the SEC’s complaint, Nutra Pharma, a microcap issuer that purports to make pain relief drugs with cobra venom, and Deitsch, issued or posted a series of press releases that materially misled investors. The releases allegedly implied, among other things, that Nutra Pharma had engaged a company to distribute its product internationally, when it had not, and that Nutra Pharma had expanded and upgraded its cobra farm facilities, when it did not own those facilities or the cobras and there were no expansions or upgrades at that time. Nutra Pharma publicized many of these press releases while Nutra Pharma and Deitsch allegedly engaged in an unregistered distribution of its securities to retail investors. In addition, on multiple occasions, Deitsch allegedly engaged in manipulative trading to stabilize or raise Nutra Pharma’s stock price and create the appearance of active trading. Further, Nutra Pharma and Deitsch allegedly failed to make numerous required filings, including ones about the company’s sales of unregistered securities and ones about Deitsch’s beneficial ownership of the company’s securities. McManus allegedly made misrepresentations to investors while acting as an unregistered broker.

Canada’s ‘Crypto King’ and Associate Arrested, Charged With Fraud in Alleged $30M Ponzi Scheme

According to court documents and local media reports, between 2021 and 2022, approximately 160 investors gave Pleterski and his company, AP Private Equity Limited, around $40 million in Canadian dollars ($30 million USD) to invest on their behalf in the crypto and foreign exchange markets. Some of those investors, according to reports, took out loans to invest with Pleterski.

The trustee overseeing the bankruptcy case concluded that Pleterski only invested 2% of the money he was given, and spent at least $16 million on himself – buying over 10 luxury cars, traveling internationally, and renting a $8.4 million lakefront mansion for $45,000 per month. Two McLarens, two BMWs and a Lamborghini were seized during the bankruptcy process.

Sweeping ‘Bitcoin Rights’ Bill Becomes Law in Oklahoma

Oklahoma Governor Kevin Stitt signed a sweeping ‘Bitcoin Rights’ bill into law on Monday, enshrining Oklahomans’ legal right to mine, transact with, and self-custody cryptocurrencies and boosting the state’s reputation for being a friendly destination for crypto companies and investors.

The bill, HB3594, was introduced by Republican state Rep. Brian Hill and carried in the Senate by Republican state Sen. Bill Coleman. It was inspired by model policy from state-focused bitcoin mining advocacy group Satoshi Action Fund, which has helped introduce similar legislation in 15 other states.

Law Firms’ AI Nightmare Is Fewer Billed Hours and Lower Profits

Reviewing anonymized time sheets from real law firms, Brown hypothesized AI would have its biggest impact on time entries for “drafting and reviewing.” Those entries accounted for 47% of the revenue in his sample of timesheets, which came from a broad range of work performed by 10 large firms, totaling around $500,000 in revenue.

Brown estimated a conservative 5% reduction in partner hours and a 20% reduction in non-partner hours. That led to a 13% revenue decline and a 7% cut in profit margins.

That’s certainly not the AI future law firm leaders are dreaming of.

Fostering a Healthy “Tone at the Top” at Audit Firms

I have talked before about the importance of tone at the top at issuers. But a healthy tone at the top is of paramount importance at public accounting firms as well. Indeed, academic research has “long stressed the crucial role that tone at the top, set by leadership, plays in influencing firm culture and how it is ultimately reflected in the actions and behaviors of [auditors].” The tone at the top of an audit firm determines whether the culture is focused on delivering high-quality audits or is a profit-center chasing the short-term bottom line, and whether “top management extols the important role audits play in the capital markets” or acts as if audits are little more than compliance “commodities.”

For example, setting a proper tone at the top is critical in supporting auditors’ ability to exercise professional skepticism—having an attitude that includes a questioning mind and a critical assessment of audit evidence at all times….