WSJ: Work-From-Home "Spawns Insider Trading"

Love and Deceit: When Work-From-Home Spawns Insider Trading

There is a rich history in securities fraud of “pillow talk” cases, in which insider traders glean confidential information from romantic partners. The Covid era offered a twist: Secrets weren’t spilled in the bedroom or over a bottle of wine, but during the humdrum routine of two adults working from home.

“During Covid, there was an uptick in brazen conduct,” said Edward Imperatore, a defense lawyer at law firm Morrison & Foerster. “In a work-from-home environment, people acted with more impunity.”

***

One thing hasn’t changed since the earliest days of pillow talk: It is usually the men who can’t resist the urge to take advantage of their confidential information.

“Insider trading is an equal opportunity crime,” said Dixie Johnson, a partner at law firm King & Spalding who advises companies on how to avoid such situations. “But the cases we see usually have involved men doing the trading.”

Elon Musk Isn’t Getting Enough Sleep

But Musk is also the chief executive officer of a public company, Tesla Inc., and you have to feel for Tesla’s board of directors:

1. On the one hand, Tesla does have policies against illegal drug use, and you could concoct a scenario in which Musk’s alleged drug use could somehow harm Tesla, either because it gets him in trouble with customers or regulators or just because being on drugs all the time makes him an erratic decision maker.

2. On the other hand, what are you gonna do about it? Fire him? That’s much worse for Tesla, probably. Ask him to stop? Good luck with that.

One good actual answer to “what are you gonna do about it” is “quit”….

***

Reasonable. The other answer is “talk about it in hushed, worried tones,” which is fine for talking about your friend’s drug use, but actually legally problematic for a public company board of directors. The correct version of that answer is “talk about it in hushed, worried tones, but not in a way that will make it into any official board minutes that are later discoverable in litigation”….

The Latest Dirty Word in Corporate America: ESG

Many companies no longer utter these three letters: E-S-G.

Following years of simmering investor backlash, political pressure and legal threats over environmental, social and governance efforts, a number of business leaders are now making a conscious effort to avoid the once widely used acronym for such initiatives.

On earnings calls, many chief executives now employ new approaches. Some companies, including Coca-Cola, are rebranding corporate reports and committees, stripping ESG from titles. Advisers are coaching executives on alternative ways to describe their efforts, proposing new terms like “responsible business.” On Wall Street, meanwhile, some firms are closing once-popular ESG funds as interest fades.

As Crypto World Watches for Spot Bitcoin ETF, SEC Chair Gensler Says (Again) Sector is Dangerous

The entire crypto world and much of the U.S. financial sector is anxiously awaiting word from the U.S. Securities and Exchange Commission (SEC) on whether it will approve a spot bitcoin exchange-traded fund (ETF). SEC Chair Gary Gensler has chosen this moment to issue a broad warning about the hazards to investors of getting into digital assets.

Gensler – as he’s done many times – posted on X to warn people that the crypto sector is beset by scams and fraud, and that many companies in the space aren’t following securities laws.

***

It’s unclear whether Gensler’s words represent a final dig before the agency – as many expect – approves ETF applications that are approaching key deadlines. That moment is widely seen as a major turning point, because fully regulated spot ETFs would allow much easier trading of digital assets for even the most casual investor, and some estimates suggest that could mean tens of billions of dollars flowing into the industry.

US regulator denies Apple, Disney bids to skip votes on AI

Apple and Disney cannot avoid shareholder votes about their use of artificial intelligence put forward by a labor group, the top U.S. securities regulator has ruled.

In notices dated Jan. 3, the U.S. Securities and Exchange Commission rejected requests by the iPhone maker and by the entertainment giant to exclude from their upcoming annual meetings calls for reports on their use of AI.

Bitcoin ETFs: The Bull Case

Word on the street is that a bitcoin ETF will be approved this week, which would mark a milestone for the world’s first cryptocurrency, if only because there has been tremendous media interest in these investable products. Bitcoin already has mainstream attention and interest from Wall Street. What a spot bitcoin exchange-traded fund (ETF) would provide, apart from potentially positive momentum for bitcoin’s price, would be a signal of the asset’s maturity.

In other words, the bull case around an ETF boils down to legitimization….