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The Ninth Circuit held that the anti-retaliation provisions of the Sarbanes-Oxley Act do not protect whistleblowers who make internal complaints about potential violations of the Foreign Corrupt Practices Act (FCPA). The court’s ruling limits the remedies available to employees who claim to have suffered adverse employment actions in retaliation for raising FCPA concerns.…
The wake of the SEC’s guidance on classification of digital assets (here) and no-action letter to digital token issuer TurnKey Jet, Inc. (here), many may have forgotten or ignored that the final arbiter of the definition of “security” under federal law is not the SEC; it is the federal judiciary.  On March 31, 2019, Judge Vernon Broderick of the United States District Court for the Southern District of New York weighed…
On April 3, 2019, the SEC’s Strategic Hub for Innovation and Financial Technology (“FinHub”) issued a long-awaited framework for analyzing whether a given digital asset constitutes a “security” under federal law and is thus subject to the vast complex of federal securities laws and regulations.  Simultaneously, the SEC’s Division of Corporate Finance issued its first “no-action” letter for a digital token offering, stating that it will not recommend enforcement action to the Commission based on…
Last week, the United States Supreme Court settled a circuit split regarding the constitutionality of the appointment of Administrative Law Judges (“ALJs”) by the Securities and Exchange Commission (“SEC” or the “Commission”).  In Lucia v. SEC, the Court held that the Commission’s five ALJs are “officers” subject to the Constitution’s Appointments Clause, which requires officers to be appointed by the President, “Courts of Law,” or “Heads of Departments.”  And because the SEC’s ALJs were hired…
In late April, the U.S. Securities and Exchange Commission (SEC) hit Yahoo with a $35 million dollar fine for failing to properly assess and disclose a 2014 data breach that affected more than 500 million user accounts. The case marks the first time the SEC has charged a public company with cybersecurity-related disclosure violations and serves as a reminder that the SEC remains laser-focused on cybersecurity issues. Read our full client alert  here.…
In a unanimous decision authored by Justice Ruth Bader Ginsburg, the United States Supreme Court ruled on February 21, 2018 that the anti-retaliation provisions of the Dodd–Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank” or the “Act”) only cover whistleblowers who report potential violations of the securities laws to the Securities and Exchange Commission (the “SEC” or the “Commission”) and not those who only report internally.  The decision reversed an earlier ruling by the…
Annually, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (“OCIE”) publishes its examination priorities for the new year.  Recently, OCIE announced five priorities that will inform its examinations moving in to 2018. OCIE is committed to “promoting compliance, preventing fraud, identifying and monitoring risk, and informing policy.” In support of these “pillars,” OCIE intends to focus on: Issues of importance to retail investors, such as fee disclosures, mutual funds, and exchange-traded funds;…
2018 arrived in the wake of big changes at the U.S. Securities and Exchange Commission (“the SEC”).  Jay Clayton was sworn in as Chairman of the Commission in May, naming Steve Peikin and Stephanie Avakian as Co-Directors of the Enforcement Division (the “Division”) in June.  As many do for the start of a new year, they have evaluated the Division’s priorities and promised a new focus.  According to a speech by Ms. Avakian late last…
The SEC often encourages self-reporting, cooperation, and remediation in speeches and policy statements. In a settled enforcement action announced today, the Commission made clear just how valuable those efforts can be, allowing a company to settle accounting controls and disclosure violations with no financial penalty whatsoever. According to the SEC’s announcement, from 2012 to early 2016, the former CEO and CFO of Provectus Biopharmaceuticals, Inc. obtained millions of dollars from the company by using insufficient…
For the past few years, the SEC has been battling challenges to the constitutionality of its administrative proceedings. Today, in a drastic shift in position, the SEC issued an order ratifying its prior appointment of its five sitting Administrative Law Judges (“ALJs”) to remedy what the SEC now seemingly concedes was an unconstitutional hiring process. Doing so, the SEC announced, will “put to rest any claim that administrative proceedings pending before, or presided over by,…