Will Trump's SEC End the Off-Channel Communications Cases?

Trump’s SEC Likely to Halt ‘Off-Channel’ Texting Probe That’s Led to Billions in Fines

The regulators zinged the companies for failing to preserve text messages between employees and customers via phone apps outside the communication channels investment firms normally monitor. Despite the headline-grabbing size of the penalties, and the deluge of training programs firms have launched to bolster compliance, use of the apps remains pervasive.

But the enforcement spree, like many of SEC Chair Gary Gensler’s highest-profile priorities, is premised on novel legal theories. Regulatory attorneys predict that whoever incoming President Donald Trump appoints to succeed Gensler as chair will abandon the boundary-pushing and focus on issues affecting everyday investors.

“All indications are that the SEC’s ‘sweep’ regarding off-channel communications will come to an abrupt end once Trump’s appointees take the reins at the SEC,” said David Oliwenstein, a securities enforcement and white-collar defense partner at Pillsbury Winthrop Shaw Pittman. “I suspect there are some legacy cases that are in the pipeline that the SEC staff will try to finalize before new leadership is appointed, but that should mark the end of the sweep.”

Trump Said to Consider Crypto Lawyer Teresa Goody Guillén to Lead SEC

Teresa Goody Guillén, a veteran of the U.S. Securities and Exchange Commission, is among the candidates president-elect Donald Trump is considering to lead the agency, people familiar with the situation said.

Goody Guillén is a partner at law firm BakerHostetler and co-lead of its blockchain practice. Crypto companies are privately advocating for her to head the regulator based on her experience serving the SEC and opposing the agency on behalf of blockchain companies and traditional Wall Street firms.

“She is the best candidate of all the people that are currently being opined on,” said Brendan Playford, co-founder of Masa, a token-powered decentralized data provider for AI companies. Goody Guillén would make immediate changes to the SEC, he said.

Pfizer cannot recoup $75 million from SEC insider trading settlement, judge rules

A federal judge on Tuesday rejected Pfizer’s bid to recoup about $75.2 million left over from a U.S. Securities and Exchange Commission insider trading settlement with billionaire Steven A. Cohen’s former hedge fund SAC Capital Management.

U.S. District Judge Victor Marrero in Manhattan said Wyeth, a drugmaker Pfizer bought in 2009, did not qualify as a victim of the securities violations underlying the SEC case, and therefore was not entitled to the funds.

Marrero directed that the money be paid to the U.S. Treasury, which the SEC had requested.

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The SEC had $75.2 million left over after compensating Wyeth and Elan investors for their losses. Pfizer said it deserved that money because the neurologist, Sidney Gilman, breached a fiduciary duty to Wyeth, where he was a consultant.

But the judge said the reputational harm that Wyeth suffered from the scandal did not mean it also suffered financial harm.

When IR Met AI: How the Technology Is Shaping Earnings-Day Prep

Executives at many companies are using AI to refine word choice in their prepared remarks, for instance, in deciding whether to say the quarter was “strong” or “solid,” said Dan Sandberg, head of quantitative research and solutions at S&P Global Market Intelligence. The firm’s tool recently preferred “strong,” based on the earnings metrics of other companies that used the word on their earnings calls, he said.

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“Is the CFO worried or optimistic, and could that give some indication as to how future performance is going to look for the company?” Soter said, describing the sort of possibly unintended information that AI can catch before it goes out.

Increased reliance on AI in drafting news releases or conference-call scripts poses new risks for companies, advisers say, among them ethical issues, like transparency and accuracy. But the biggest may be keeping information private. Businesses that have adopted or invested in private large language models have better security for their not-yet-public details than those that turn to public tools, they said. Uploading private, material information to a public domain opens the possibility of unintended disclosure.

Former Senior Manager of Federal Reserve Bank of Richmond Pleads Guilty to Insider Trading and Making False Statements

A Virginia man pleaded guilty today for committing insider trading and making false statements about his trading to his employer, the Federal Reserve Bank of Richmond (FRBR).

According to court documents, Robert Brian Thompson, 43, of Mosley, worked as a bank examiner and senior manager with supervisory duties for the FRBR. Due to his position, Thompson was privy to confidential information about certain financial institutions under FRBR’s supervision, including confidential supervisory information (CSI), which is the property of the Board of Governors of the Federal Reserve. As an employee of the FRBR, Thompson was also required annually to file a “Form for Employees Involved with Supervision and Regulation,” which is also called a “Form D.” Among other things, Form D requires employees to disclose if they have any assets, including any equity interest in any banks that are members of the Federal Reserve System and/or bank holding companies.

From October 2020 through February 2024, Thompson misappropriated confidential information, including CSI, to execute trades in publicly traded financial institutions. In total, Thompson executed 69 trades in seven different publicly traded financial institutions for a total of approximately $771,678 in personal profits….