SEC Publishes Annual Staff Report on Nationally Recognized Statistical Rating Organizations

The Securities and Exchange Commission today published a staff report that provides a summary of the staff’s examinations of nationally recognized statistical rating organizations (NRSROs) and discusses the state of competition, transparency, and…

Read the Full Press Release


Have a securities law question? Call New York Securities Lawyers at 212-509-6544.

Activision Blizzard to Pay $35 Million for Failing to Maintain Disclosure Controls Related to Complaints of Workplace Misconduct and Violating Whistleblower Protection Rule

The Securities and Exchange Commission today announced that Activision Blizzard Inc., a video game development and publishing company, agreed to pay $35 million to settle charges that it failed to maintain disclosure controls and procedures to ensure…

Read the Full Press Release


Have a securities law question? Call New York Securities Lawyers at 212-509-6544.

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…

Read the Full Press Release


Have a securities law question? Call New York Securities Lawyers at 212-509-6544.

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…

Read the Full Press Release


Have a securities law question? Call New York Securities Lawyers at 212-509-6544.

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.

http://www.cornerstone.com

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…

Read the Full Press Release


Have a securities law question? Call New York Securities Lawyers at 212-509-6544.

SEC Proposes Rule to Prohibit Conflicts of Interest in Certain Securitizations

The Securities and Exchange Commission today proposed a rule to implement Section 27B of the Securities Act of 1933, a provision added by Section 621 of the Dodd-Frank Act. The rule is intended to prevent the sale of asset-backed securities (ABS) that…

Read the Full Press Release


Have a securities law question? Call New York Securities Lawyers at 212-509-6544.

Silvestre Fontes Named Director of Boston Regional Office

The Securities and Exchange Commission today announced that Silvestre A. Fontes has been named Regional Director of the Boston office, starting next week. John Dugan and Kevin Kelcourse, who have served as Acting Co-Regional Directors, will remain as…

Read the Full Press Release


Have a securities law question? Call New York Securities Lawyers at 212-509-6544.

SEC Issues $28 Million Award to Joint Whistleblowers

The Securities and Exchange Commission today announced an award of more than $28 million to joint whistleblowers who provided critical information and assistance in an SEC enforcement action. The joint whistleblowers’ detailed information prompted the…

Read the Full Press Release


Have a securities law question? Call New York Securities Lawyers at 212-509-6544.