Will the NDTX Become the New SDNY?

SEC Marks End of Shutdown with Six Adviser Enforcement Actions

The Securities and Exchange Commission sued half a dozen investment advisers, a notable spike in enforcement activity coinciding with the end of the government shutdown, alleging misrepresentations in the companies’ disclosures.

The Thursday complaints allege that the advisory firms didn’t accurately portray their business location, assets under management, and clients in Form ADV filings.

Six new actions in a single day are a departure from limited agency capacity during the shutdown, against the backdrop of lower SEC enforcement activity after President Donald Trump’s inauguration, compared to litigation over the same period last year.

New York Dominance in Securities Cases Threatened by North Texas

The US District Court for the Southern District of New York has dominated insider trading and other securities fraud matters for several reasons, such as the securities law expertise of its federal prosecutors and district court judges as well as a well-developed body of securities case law. But a major factor is that The New York Stock Exchange and the NASDAQ are headquartered in Manhattan.

This has allowed criminal fraud cases and Securities and Exchange Commission enforcement actions to proceed in the Southern District of New York, often with the only connection being that the securities at issue in the alleged fraud trades on one of these Manhattan-based exchanges.

However, the center of gravity for criminal and civil securities fraud enforcement, including insider trading, may be shifting to the Northern District of Texas. Three securities exchanges are slated to either open or establish headquarters in Dallas within the next year, opening the door to greater government enforcement of insider trading laws and other securities fraud cases outside of New York.

Charlie Javice Billed Hotels and Cellulite Butter as Legal Fees, JPMorgan Says

JPMorgan bought Javice’s educational startup Frank for $175 million in 2021. She was arrested two years later on charges she defrauded the bank by misstating the amount of customers the startup had and was convicted in March.

The bank has been picking up the legal bills for Javice and one of her co-executives following a judge’s order from 2023 that it is seeking to have overturned, citing allegedly questionable expenses. The bank has now been billed almost as much—more than $142 million—for their defense as it paid to buy the startup in the first place.

Pittinger listed some of Javice’s expenses—hotels, meals, and personal hygiene products—and said that her legal staff billed so many hours over several days that “it’s just humanly impossible for that to have really occurred.” He cited the cellulite butter, a moisturizer that is supposed to help reduce the bumps and ripples on skin created by cellulite.

“There’s never been a case, to my knowledge, with such extreme abuses,” he said. “I don’t know how any counsel in good faith could submit something like that for reimbursement of expenses, saying it’s reasonably related to the defense of a criminal action.”

How to Not Get Kidnapped for Your Bitcoin

It was the final day of a weekend-long cryptocurrency convention on the shore of Lake Lugano, near the Italian border. A small group of investors had lined up in a conference room to have their hands bound with plastic zipties. Now they were learning how to get them off.

“Your teeth will get through anything,” Mr. Kayll advised. “But it will bloody well hurt.”

Most people don’t go to an international crypto conference expecting to learn how to gnaw through plastic. But after hours of panels devoted to topics like Bitcoin-collateralized loans, these investors were looking for something more practical. They wanted to know what to do if they were grabbed on the street and thrown into the back of a van.

Already paranoid about scams, hacks and market turmoil, wealthy crypto investors have lately become terrified about a much graver threat: torture and kidnapping.

Ponzi Schemer Who Won Trump Clemency Gets New 37-Year Term

A convicted Ponzi schemer whose 24-year prison term was commuted by President Donald Trump in 2021 was sentenced to another 37 years behind bars for stealing $44 million from investors after he was released.

Eliyahu “Eli” Weinstein, 51, was sentenced Friday for defrauding investors who believed their money was buying Covid-19 masks, baby formula and first-aid kits bound for Ukraine. Instead, Weinstein and his conspirators used the money to repay early investors and for personal expenses like gambling in casinos and buying real estate, prosecutors said in federal court in Trenton, New Jersey.