UK's FCA Warns M&A Firms that Organized Crime "Likely" Targeting Junior Staffers for Inside Info

Four men under investigation on suspicion of multiple offences

On 1 February 2024, the FCA working with the National Crime Agency (NCA) conducted a major operation to arrest 3 London based individuals on suspicion of insider dealing, conspiracy to insider deal and money laundering linked to organised crime.

More than 38 FCA and NCA officers were involved in the operation at the 3 residential London properties. Several digital devices were seized in searches conducted by FCA investigators.

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Steve Smart, joint executive director with responsibility for delivering enforcement and market oversight for the FCA, said:

‘Insider dealing poses a significant threat to the integrity of financial markets both in the UK and overseas. The FCA is committed to combatting organised criminal networks involved in this threat….”

FTX and Binance: a tale of two cases

No two prosecutions are alike, but the difference in outcomes in these two cases is striking. To be sure, FTX and Bankman-Fried, as the government alleged and the jury ultimately found, engaged in the most consequential financial crimes — systematic fraud upon customers and investors — while Binance and Zhao pleaded guilty to “process” crimes. These included failure to register with the Treasury Department as a money-services business and implement an effective money-laundering program. Yet the latter were also serious in the eyes of the government. As the DOJ explained at the time of the plea agreement, Binance’s “willful failures allowed money to flow to terrorists, cybercriminals, and child abusers throughout its platform.”

The decisive difference may be how the parties responded, or failed to respond, to the government’s investigation. In the case of FTX, prosecutors in the Southern District of New York moved with remarkable swiftness, obtaining their first indictment about a month after the company started to collapse. This left Bankman-Fried and his advisors little time to formulate a coherent strategy in response to the grand jury’s subpoenas.

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However, unfortunately for Binance, this story is not complete….

Lyft CEO Says ‘My Bad’ on Margin Error, ‘It Was One Zero’

Lyft Inc. Chief Executive Officer David Risher’s response to a clerical error that unintentionally inflated the company’s earnings outlook on Tuesday and sent shares soaring: “My bad.”

“First of all, it’s on me,” Risher said in an interview with Bloomberg Television on Wednesday, taking the blame for a typo in a company press release Tuesday that erroneously projected a particular measure of earnings margin to expand by an eye-watering 500 basis points. (In reality, Lyft expects margins to grow by 50 basis points.) “This was a bad error,” he said, “but it was one zero in a press release.”

Tesla’s Board Chair Under Scrutiny for Oversight of Elon Musk

Late last month, a Delaware judge sharply criticized Ms. Denholm’s leadership while striking down Mr. Musk’s 2018 compensation package, which is worth more than $50 billion. Ms. Denholm took a “lackadaisical approach to her oversight obligations” at Tesla, said Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery.

The judge also questioned whether Ms. Denholm could be independent from Mr. Musk, because her job on Tesla’s board had earned her more than [AMOUNT]. In court last year, Ms. Denholm described that pay as “life changing.” Her compensation greatly exceeds what other large U.S. companies like Apple and Alphabet, Google’s parent, pay the independent chairs on their boards.

“Musk operates as if free of board oversight,” the judge said in her ruling.

Game Over: Robinhood Pays $7.5 Million to Resolve “Gamification” Securities Violations

The charges and settlement with Robinhood represent the latest development in a growing trend of concern amongst securities regulators regarding how modern broker-dealers and investment advisors interact with their customers in the digital age. Although the United States Securities and Exchange Commission (the “SEC”) has not enacted a fiduciary duty standard as extensive as that in Massachusetts, the SEC recently proposed new conflict of interest rules that, if adopted, will require broker-dealers and investment advisors to investigate whether their use of most forms of technology in investor interactions results in a conflict of interest that places the interests of the firm ahead of the investor’s interests and, if so, take affirmative action to eliminate or neutralize that conflict of interest. In his public comments accompanying the SEC’s proposed rules, Chair Gensler identified specific concern over the possibility that automated digital engagements with customers, such as “push” notifications or stock recommendations, could be leveraged by firms to subtly nudge investors into making decisions that benefit the firms’ own revenues, profits, and interests rather than the individual investor’s—a hypothetical that is substantially similar to the course of action the MA Securities Divisions alleged Robinhood had engaged in.

France’s Top Court Says Bloomberg Liable Over Hoax Release

France’s top court upheld an earlier decision that Bloomberg LP could be sanctioned after its journalists published information from a fake press release in 2016 that sent Vinci SA shares tumbling.

In a statement released with its ruling on Wednesday, the Cour de Cassation, France’s supreme court, said it agreed with a 2021 ruling by the Paris court of appeal that the company could be sanctioned over the issue even though it gained no advantage from the release and didn’t intend to mislead the market. It also said the €3 million fine decided by the appeals court was proportional.

Bloomberg faced an initial penalty of €5 million decided by the enforcement committee of the Autorite des Marches Financiers, an amount that was reduced in the 2021 appeals court decision.

“Ask a Recruiter” - How Long Does the Law Firm Hiring Process Take?

Barring any unexpected road bumps, my typical candidate seeking an equity partner position can expect the process to take about four months from start to finish – or, more aptly, “door to door.” However, I often begin meeting with candidates many months prior to the point at which they hit the “start” button and we begin approaching firms. Counsel and associates usually find the process moves much more quickly.

Four factors will influence how long a particular attorney is likely to spend regaling their partner, children, and/or The One Colleague Who Knows They’re Angling to Leave about the minute trials and tribulations of their job search. They are….