Category Archives: Investor

Small Business Advisory Committee to Host Meeting to Discuss Alternatives to Traditional Private Company Financing, Private Fund Reforms, and Public Company Investment Research


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Small Business Advisory Committee to Host Meeting to Discuss Alternatives to Traditional Private Company Financing, Private Fund Reforms, and Public Company Investment Research
The Securities and Exchange Commission’s Small Business Capital Formation Advisory Committee today released the agenda for its meeting on Tuesday, Feb. 7. The Committee will discuss alternative approaches to private company financing, the Commission’s…

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SEC Proposes Updates to Ethics Rules Governing Securities Trading by Personnel


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SEC Proposes Updates to Ethics Rules Governing Securities Trading by Personnel
The Securities and Exchange Commission today proposed amendments to its ethics rules to strengthen and modernize its ethics compliance program. The amendments would add new requirements and prohibitions to the program, which already includes some of the…

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SEC Tightens Cryptocurrency Enforcement


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SEC Tightens Cryptocurrency Enforcement
The SEC continues to make cryptocurrency-related enforcement a top priority under Chair Gary Gensler, bringing 30 enforcement actions against digital-asset market participants in 2022, up 50% from the 20 actions brought in 2021 and the highest number since 2013, according to a Cornerstone Research report released today.

The report, SEC Cryptocurrency Enforcement: 2022 Update, found that the SEC brought 24 litigation actions in U.S. federal courts and six administrative proceedings in 2022. The number of litigations particularly increased from 14 the previous year. According to the report, which is based on data from Cornerstone Research’s Cryptocurrency Enforcement Database, in 2022 the SEC also issued two delinquent filing orders, two follow-on actions, and one stop order pursuant to Section 8(d) of the Securities Act.”Under Chair Gensler, the SEC has sharpened its focus on cryptocurrency lending and trading platforms and decentralized finance platforms,” said Simona Mola, the report’s author and a principal at Cornerstone Research. “As Chair Gensler has noted, the ‘runway is getting shorter’ for crypto intermediaries to register with the SEC. This could lead to more enforcement actions coming from the SEC’s Crypto Assets and Cyber Unit, which recently expanded its workforce to investigate securities law violations in the crypto markets.”In 2022, the SEC charged 79 defendants or respondents in cryptocurrency enforcement actions, of which 56 (71%) were individuals and 23 (29%) were firms. The proportion of enforcement actions charging only individuals has grown under the Gensler administration from nearly 20%, on average, in the 2013‒2020 period to 35% in 2021 and 50% in 2022.

Of the 30 total enforcement actions in 2022, 14 involved initial coin offerings (ICOs), and over half (57%) of these ICO-related actions included a fraud allegation. In addition, the SEC brought first-of-their-kind charges in 2022 in the cryptocurrency space related to insider trading and market manipulation.
“Based on its implementation of the U.S. Supreme Court’s Howey test, the SEC continues to pursue actions alleging that tokens issued in ICO-related unregistered securities offerings were investment contracts subject to SEC regulation and enforcement,” said Abe Chernin, a Cornerstone Research vice president and cohead of the firm’s FinTech practice. “We have observed an increase in assistance to the SEC from outside agencies and organizations during crypto-related investigations under the Gensler administration.”Since its first cryptocurrency-related enforcement action in 2013 through the end of 2022, the SEC has brought 127 enforcement actions, including 82 litigation actions and 45 administrative proceedings against digital-asset market participants.

Over the same period, the SEC has imposed approximately $2.61 billion in total monetary penalties, of which $242 million were settlements the agency reached in 2022.

Additional Report Highlights

Of the 127 crypto enforcement actions from 2013 through 2022, 59% alleged fraud, 73% alleged an unregistered securities offering violation, and 44% alleged both. Since 2013, 70 cryptocurrency-related enforcement actions (55%) have involved ICOs.

Since 2013, the SEC has received assistance from outside agencies and organizations in 56 actions (44%). The SEC also acknowledged assistance from international authorities and organizations in 21 enforcement actions during the same period.

About 43% of the 82 cryptocurrency enforcement actions litigated in U.S. courts since 2013 occurred in New York, with 29 in the Southern District and six in the Eastern District. The SEC has, however, been increasingly litigating cryptocurrency enforcement actions in other federal courts.

Since 2013, the SEC has issued 20 cryptocurrency-related trading suspension orders and 12 delinquent filing orders, along with a number of subpoenas and follow-on administrative proceedings.

Cornerstone Research’s Cryptocurrency Enforcement Database contains cryptocurrency-related enforcement actions brought by the SEC between January 1, 2013, and December 31, 2022.

About Cornerstone Research

Cornerstone Research provides economic and financial consulting and expert testimony in all phases of litigation and regulatory matters. The firm supports clients with rigorous, objective analysis. Working with an extensive network of leading academics, former regulators, and industry specialists, Cornerstone Research identifies the most qualified experts for every case.

Founded in 1989, Cornerstone Research has always been guided by its core values: commitment to clients, experts, and staff, and to delivering consistently high-quality service. The firm has over 700 staff and offices in Boston, Chicago, London, Los Angeles, New York, San Francisco, Silicon Valley, and Washington.

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SEC Violates Privacy Laws And Releases Names and Email Addresses of 650 Individuals being Interviewed


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SEC Violates Privacy Laws And Releases Names and Email Addresses of 650 Individuals being Interviewed
During the course of an SEC investigation, the SEC itself related the names and email addresses of 650 data miners working with crypto startup Green, a blockchain project that is building a decentralized power grid. The project’s user base consists of node operators or miners.
The SEC has been investigating Green for years. It reached out to users in order to learn their experience with the firm. Members cooperated, but an employee “failed to bcc all 650 users in an email,” according to screenshots seen by the Washington Examiner.

By doing so, the commission appears to have violated the Privacy Act of 1974.
Its website clearly states that the personal data of those involved in SEC investigations are protected.
Apparently not.
———–Mark J. Astarita, Esq. is a nationally recognized securities attorney representing investors and market professionals in SEC and FINRA investigations nationwide. Have a question? Email him at mja@sallahlaw.comr
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Bloomberg to Pay $5 Million for Misleading Disclosures about Its Valuation Methodologies for Fixed Income Securities


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Bloomberg to Pay $5 Million for Misleading Disclosures about Its Valuation Methodologies for Fixed Income Securities
The Securities and Exchange Commission today announced settled charges against Bloomberg Finance L.P. (Bloomberg) for misleading disclosures relating to its paid subscription service, BVAL, which provides daily price valuations for fixed-income…

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