Topic
Securities
6,683 published works
China Law Insight
行情数据跨境许可交易中的核心商业及法律问题
By King & Wood
作者：苏萌 傅广锐 席索迪 赵哲楠 张芳源 行情数据是指经由交易所交易形成的体现各类产品价格的交易数据，典型的行情数据包括股票、债券市场的指数、大宗商品市场的结算价、基准价等。 从原理上讲，某类产品的集中交易市场汇集了各类市场参与者，不同市场参与者基于自身对产品价格的不同预期在市场上形成频繁的交易；市场参与者的交易在某种程度上属于“用钱投票”，该等“投票”行为经由市场的组织者（一般为交易所或由交易所设立的指数子公司）进行计算、编纂，就形成了反映整体市场情绪、观点的“行情”。因此，某类产品的行情数据可谓是对应市场的“晴雨表”。 阅读更多
The CLS Blue Sky Blog
SEC v. Ripple: Everyone Loses
By Edwin Hu
On July 13, Judge Analisa Torres handed down a long-awaited decision in SEC v. Ripple. Crypto enthusiasts immediately began celebrating the opinion as holding that XRP, the Ripple token, was…
Corporate Defense and Disputes
The <em>Ripple </em>Effect: Implications of the SEC’s Partial Loss in <em>SEC v. Ripple Labs Inc.</em>
By Robert Pommer, Jonathan Richman, Joshua M. Newville, Michael Guggenheim
The SEC suffered a significant loss last week in its ongoing legal battle with Ripple over the XRP digital token. While the District Court held that Ripple’s initial sales of XRP…
SDNY Blog
Judge Torres: Sales of Ripple’s Crypto Tokens on Exchanges Are Not Securities Transactions
In the SEC’s closely-watched action against the crypto firm Ripple, Judge Torres on Thursday issued a summary judgment decision finding that some types of sales of Ripple’s crypto token, XRP,…
Compliance Building
Ripple is Sometimes a Security (?)
The big challenge with crypto is how it fits into regulatory schemes that were drafted almost a century a go. Add in the politically driven split between the regulation of…
SEC Actions
This Week In Securities Litigation (Week of July 17, 2023) The talk of the town – or at least the world of the Commission – was the ruling in SEC v. Ripple, 20 Civ 0832 (S.D.N.Y. File Dec. 22, 2020) last week. The action centers the what the firm calls XRP crypto assets. The court held that the assets were not a security but in some instances may be. For those who understand the Howey test this is not a surprise. Indeed the assets involved in many of the crypto cases are commodities subject to the CFTC’s jurisdiction. In some instances the assets may be securities, such as when the Howey test is met. More on this later in the week. Last week the Commission filed a number of new cases. Those included offering fraud actions and cases involving the misappropriation of investor assets as discussed below. Have a great and safe day. SEC Proposals: The Agency proposed rule amendments to broker-dealer customer protection Rule 15c3-3. The proposal would require broker-dealers with large total credits to increase the frequency of their customer and related reserve computations from weekly to daily, according to a July 12, 2023 release (here), Rules: The Commission adopted amendments to certain rules governing money market funds. They include: increasing minimum liquidity requirements; removing provisions that permit a fund to temporarily suspend redemptions and removing the regulatory ties between the imposition of liquidity fees and a fund’s liquidity level; requiring certain funds to implement a liquidity fee framework to better allocate costs of providing liquidity to redeeming investors; and improving certain reporting requirements to improve the Commission’s ability to assess money market fund data. The new provisions were announced on July 12, 2023 (here). SEC Enforcement – Filed and Settled Actions Statistics: This week the Commission filed 3 civil injunctive actions and 1 administrative proceedings, excluding 12j, tag-along proceedings and those presenting a conflict for the author. Offering fraud: SEC v. Celsius Network Ltd., Civil Action No. 1:23-cv-60005 (S.D.N.Y. Filed July 13, 2023) is an action which names as defendants Celsius and its founder Alexander Mashinsky. Defendants are alleged to have raised billions of dollars through unregistered and fraudulent offerings. The company, founded in 2018, claimed to have an alternative to traditional financial institutions in the crypto asset area. There were two key investment opportunities. The first promised high earning rates for those who purchased the CEL, Defendants’ crypto asset. The second came from the Earn Interest Program. There investors tendered their crypto assets to Celsius in exchange for interest payments supposedly as high as 17%. The programs were marketed with a series of false statements such as claims that the trading was not risky or that much more than 80% of revenue was frequently paid out. The complaint alleges violations of Securities Act Sections 5(a), 5(c) and 17(a) and Exchange Act Sections 9(a)(2) and (10(b). The company is cooperating with the Commission and consented to the relieve sought in the complaint. The U.S. Attorney’s Office for the Southern District of New York announced a parallel criminal action against Defendants in this action. See Lit. Rel. No. 25779 July 14, 2023). Misappropriation: SEC v. Todd, Civil Action No. 5:23-cv-00431 (M.D. Fla. Filed July 12, 2023) which names as defendants Joseph Todd, Todd Financial Services, Inc. and TFS Insurance Services LLC. Defendant Joseph Todd and the two entity defendants that are controlled by him misappropriated at least $3 million from 20 customers of the broker who employed him. This was done by having investors write checks to the entity defendants. Defendant Todd subsequently kept the funds for his personal use. The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Section 10(b). Defendants have consented to the entry of injunctive relief and Mr. Todd, in addition, agreed to the entry of an officer/director bar. Defendants have also agreed to pay disgorgement, prejudgment interest and penalties in amounts to be determined later. See Lit. Rel. No. 25777 (July 13, 2023). Offering fraud: SEC v. Choudhury, Civil Action No. 1:23-cv-00573 (M.D.N.C. Filed July 12, 2023) is an action which names as defendants: Nayeem Choudhury and Dream Venture Capital Group, LLC. Defendant Nayeem Choudhury is a clinical research project manager at UNC Chapel Hill; Dream Venture is owned by him. Beginning in mid-2022, Defendants have raised about $9.3 million for what was claimed to be a hedge fund. In reality, it is a Ponzie scheme that lost at least $4.8 million trading. Investor funds have been diverted in part to personal use and in part to repay other investors. The complaint alleges violations of Securities Act Sections 5(a), 5(c0 and 17(a), Exchange Act Section 10(b) and Advisers Act Sections 206(1), 206(2) and 206(4). The case is in litigation. See Lit. Rel. No. 25774 July 12, 2023). Microcap stock promotion: SEC v. Costello, Civil Action No. 25773 (W.D. Wash.) is a previously filed action in which Defendants David Ferraro and Justin Costello engaged in a two year stock promotion scheme beginning in late 2019. During the period Defendants Ferraro and Costello engaged in the stock promotion of at least five microcap stocks owned by Defendant Costello. No disclosure was made regarding the ownership of the shares or the fact that the shares would be sold with each Defendant receiving a cut of the profits. Mr. Farraro previously consented to the entry of a bifurcated settlement. He consented to the entry of permanent inunctions based on Securities Act Section 17(a) and Exchange Act Section 10(b). The final judgment against Mr. Farraro included those provisions as well as a penny stock bar. He was also directed to pay disgorgement of $142,724.97 and prejudgment interest of $11,704.92. No penalty was imposed based on an affidavit regarding financial condition. See Lit. Rel. No. 25773 (July 11, 2023). Unregistered exchange: In the Matter of RSE Markets, Inc., Adm. Proc. File No. 3-21526 (July 12, 2023) is a proceeding which names as respondent RSE. The Order alleges that beginning on July 1, 2018, and continuing for about three years, the firm maintained and provided the Rally Platform. It consisted of a website and trading functionality for U.S. based retail investors to purchase and sell equity interests issued by RSE affiliates in collectible assets. The firm also maintained a secondary market where it aggregated customer orders and matched them by price and order without charge. The Order alleges violations of Exchange Act Section 5. To resolve the proceedings, Respondent cooperated with the investigation and consented to the entry of a cease-and-desist based on the Section cited in the order. Respondent also agreed to pay a penalty od $350,000. FinCEN Task force: The FinCEN Financial Action Task Force held a meeting in San Antonio and brought together public and private stakeholders to combat fentanyl trafficking and human smuggling on July 12, 2023. Australia Comments: Deputy Chair Karen Chester, published an article titled ASIC Greenwashing Antidote, on July 22, 2023 in the Company Director Magazine (here). ESMA Assessment: The European Securities and Markets Authority and the National Competent Authorities announced an assessment of disclosure and sustainability risks in the investment fund sector on July 6, 2023 (here). Hong Kong Remarks: Tim Lui, delivered remarks at the Law Society of Hong Kong’s Forum titled “Developing Financial Markets in Changing Times” July 12, 2023 (here). Singapore Report: The Monetary Authority of Singapore published its Annual Report on the Financial Sector Development Fund on July 5, 2023 (here), 3
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D&O Discourse
The State of Securities Litigation: Why Don’t We Litigate “Derivative Litigation” Anymore?
By Doug Greene
Over the years, I’ve bemoaned the lack of “litigation” in “securities litigation.” In this post, I discuss the same problem in “derivative litigation:” why don’t we litigate derivative cases anymore? …
The D&O Diary
Baxter Hit with Supply Chain-Related Securities Class Action Lawsuit
In my 2022 year-end wrap up of D&O insurance developments, I identified macroeconomic factors as among the sources of D&O claims during the past year including, among other things, interest…
New York Venture Hub
Parting the Crypto Sea: Ripple’s XRP Ruled to be a Security When Sold to Private Investors, But Not When Sold on an Exchange
Judge Analisa Torres’ greatly anticipated Order in the SEC’s lawsuit against Ripple is a split decision. The Order basically finds that Ripple’s digital token XRP is a security when sold…
Consumer Financial Services Law Monitor
<em>SEC v. Ripple Labs, Inc.</em>: XRP Considered an Unregistered Security in Institutional Sales but Not in Programmatic Sales or Other Distributions
By Jay Dubow, Robert Friedel, Ethan G. Ostroff, Mary Weeks, Isabela Herlihy
In a long-awaited decision in SEC v. Ripple Labs, Inc., U.S. District Judge Analisa Torres of the Southern District of New York held that Ripple Labs, Inc.'s (Ripple) XRP token…