Implications of SEC attempt to curb indemnification for private fund managers -
The SEC spent 2022 making multiple and sweeping proposals to amend rules under the Advisers Act, many of which have the ability to...more
Crypto firm bankruptcies and resulting disruption in the crypto ecosystem will continue to exacerbate liquidity and regulatory concerns in this space. Signs of contagion are evident as prices of almost every cryptocurrency...more
Everything, everywhere, all at once, as a descriptor, captures the litigation and regulatory risks for the asset management industry in 2023. Every corner of the market faces greater risks than at any time since 2008. After...more
Government scrutiny of the crypto market has been sharply increasing in recent months on the criminal and civil enforcement fronts.
In parallel proceedings that will be seen in other digital asset contexts — as in the...more
3/15/2023
/ Blockchain ,
CFTC ,
Coinbase ,
Corporate Counsel ,
Criminal Investigations ,
Crypto Exchanges ,
Cryptoassets ,
Cryptocurrency ,
Department of Justice (DOJ) ,
Digital Assets ,
Enforcement Actions ,
Howey ,
Insider Trading ,
SCOTUS ,
Securities and Exchange Commission (SEC)
The organizers of an initial coin offering (ICO) recently won dismissal of an investor’s fraud claims by establishing that their public risk disclosures negated the investor’s claims of reliance on alleged misstatements. The...more
2/10/2023
/ Cryptocurrency ,
Disclosure ,
Dismissals ,
Fraud ,
Initial Coin Offering (ICOs) ,
Investment ,
Investors ,
Purchase Agreement ,
Regulation A ,
Securities ,
Securities and Exchange Commission (SEC) ,
Securities Litigation ,
Simple Agreement for Future Tokens (SAFT)
Yesterday the SEC’s Division of Enforcement announced its Enforcement Results for Fiscal Year 2022, and there are a few key takeaways for fund managers.
The Commission brought 760 total enforcement actions in FY 2022,...more
The SEC spread its reach to Hollywood this month – on October 3, 2022, the SEC announced charges against Kim Kardashian for her social media promotions of EMAX, a digital token issued by EthereumMax. The SEC found that...more
10/14/2022
/ Celebrity Endorsements ,
Cryptoassets ,
Cryptocurrency ,
Disclosure Requirements ,
EDGAR ,
Ethereum ,
Failure To Disclose ,
Kim Kardashian ,
Penalties ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Social Media
In congressional testimony on Thursday, September 15, U.S. Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam urged U.S. Senators to pass a bill that would explicitly grant the CFTC broad regulatory oversight...more
In Jarkesy v. Securities and Exchange Commission, the Court of Appeals for the Fifth Circuit issued a remarkable opinion holding numerous aspects of the SEC’s administrative enforcement regime are unconstitutional. The May...more
5/23/2022
/ Adjudicatory Process ,
Administrative Law Judge (ALJ) ,
Administrative Proceedings ,
Appeals ,
Article II ,
Constitutional Challenges ,
Enforcement Actions ,
Enforcement Authority ,
Lack of Authority ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Violations
Last month, we predicted that a renewed focus by the SEC on insider trading, MNPI and related internal controls would be one of the Top Ten Regulatory and Litigation Risks for Private Funds in 2022. Last week, the SEC’s...more
The SEC last month proposed rules under the Advisers Act indicating a dramatic shift in how the SEC intends to reduce conflicts of interest involving private fund managers and their investors. As we previously noted in the...more
5/3/2022
/ Anti-Fraud Provisions ,
Clawbacks ,
Conflicts of Interest ,
Fund Managers ,
Investment ,
Investment Adviser ,
Investment Advisers Act of 1940 ,
Investment Management ,
Investors ,
Private Funds ,
Proposed Rules ,
Regulatory Agenda ,
Regulatory Reform ,
Securities and Exchange Commission (SEC) ,
Securities Regulation
Last month, the SEC proposed new rules under the Advisers Act that, if implemented, would be the most significant enhancement of disclosure obligations for private fund managers since the Dodd-Frank Act.Citing investor...more
Over the past few years, the SEC has brought fewer insider trading and Material Non-Public Information (MNPI)-related cases compared to historical numbers. We expect to see a reversal of that trend in 2022.
The SEC has...more
2021 continued the trend of increased regulatory focus on privacy and cybersecurity for private investment funds in the U.S. and abroad. There are no signs of the trend leveling off any time soon. One of the topics that...more
A threshold question in many cryptocurrency inquiries is whether the digital assets qualify as securities under the federal securities laws. If so, then they are subject to a full suite of federal securities regulations....more
3/1/2022
/ Anti-Money Laundering ,
BSA/AML ,
CFTC ,
Cryptocurrency ,
Digital Assets ,
Financial Services Industry ,
Financial Transactions ,
Howey ,
Investment Contract ,
Non-Fungible Tokens (NFTs) ,
Regulatory Oversight ,
Securities and Exchange Commission (SEC) ,
Unregistered Securities
The SEC’s push to regulate the next generation of blockchain-based applications will likely give rise to disputes and enforcement actions, particularly in the developing decentralized finance (DeFi) space....more
The SEC prevailed on a motion to dismiss a closely watched lawsuit alleging that a company employee had engaged in insider trading based on news about a not-yet-public corporate acquisition when he purchased securities of a...more
For much of 2021, the SEC has been in transition. New Enforcement staff have been settling into their roles since April of 2021, when Gary Gensler was confirmed and sworn in as Chair of the SEC. Under former Chairman Jay...more
1/6/2022
/ Cryptocurrency ,
Disruptive Trading Practices ,
Enforcement Actions ,
Fund Managers ,
Hedge Funds ,
Investment Management ,
Private Equity ,
Private Funds ,
Securities and Exchange Commission (SEC) ,
Securities Violations ,
Special Purpose Acquisition Companies (SPACs)
The Biden administration's climate-change priorities and the Securities and Exchange Commission's increased emphasis on environmental, social, and corporate governance (ESG) have come into focus. The global impact of ESG...more
1/5/2022
/ Business Plans ,
Capital Investments ,
Corporate Governance ,
Corporate Social Responsibility ,
Disclosure Requirements ,
Environmental Social & Governance (ESG) ,
EU ,
Investment Management ,
Regulatory Agenda ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Sustainability
On November 18, 2021, the SEC’s Division of Enforcement announced its Enforcement Results for Fiscal Year 2021, and there are a few key takeaways for fund managers....more
On September 14, 2021, U.S. Securities and Exchange Commission Chair Gary Gensler testified before the Senate Committee on Banking, Housing, and Urban Affairs. During his testimony, he stated that the SEC is exploring...more
With new types of digital assets and related business on the rise, federal authorities have been busy investigating. Recently, the SEC, FinCEN and the CFTC have imposed some notable settlements involving cryptocurrency...more
8/27/2021
/ Bank Secrecy Act ,
BitMEX ,
CFTC ,
Cryptocurrency ,
Decentralized Finance (DeFi) ,
Digital Assets ,
Enforcement Actions ,
FinCEN ,
Popular ,
Securities and Exchange Commission (SEC) ,
Securities Regulation ,
Securities Transactions ,
Securities Violations ,
Trading Platforms ,
Unregistered Securities ,
Virtual Currency
The SEC recently charged a former employee of a biopharmaceutical company with insider trading in advance of an acquisition but with a unique twist: Trading the securities of a company unrelated to the merger. ...more
8/25/2021
/ Acquisition Agreements ,
Enforcement Actions ,
Insider Trading ,
Misappropriation ,
Securities and Exchange Commission (SEC) ,
Securities Fraud ,
Securities Litigation ,
Securities Transactions ,
Securities Violations ,
Stock Options ,
Stock Prices
The U.S. Securities and Exchange Commission (“SEC”) has brought an enforcement action against a special purpose acquisition company (“SPAC”) and its major participants, highlighting enhanced regulatory scrutiny of SPACs and...more
We anticipate a more assertive regulatory enforcement program under the Biden administration, particularly focused on fund managers’ conflicts of interest, advisers’ codes of ethics, and related policies and procedures...more