In a recent development, the D.C. Circuit has overturned the Security and Exchange Commission’s (SEC) denial of a company’s bid to convert its bitcoin trust into an Exchange-Traded Fund (ETF). The company had filed the application to make this transition in October 2021 under Section 19(b)(1) of the Securities Exchange Act of 1934, and Rule…
The U.S. Securities and Exchange Commission (SEC) made its first foray into Non-Fungible Tokens (NFTs), raising palpable concerns for an expected increase in enforcement. This was triggered by the SEC’s settlement with Impact Theory LLC, a Los Angeles-based media and entertainment company. Allegations of unregistered securities offering resulted in the firm settling with the SEC….
In late July 2023, the Securities and Exchange Commission (SEC) adopted novel rules, necessitating public companies to disclose cybersecurity incidents and their policies and practices regarding cybersecurity governance. Borrowing mostly from their original proposal issued in March 2022, the SEC has made some modifications to the requirements of cybersecurity disclosure. These changes were adopted by…
In a decisive ruling on August 24, 2023, the Second Circuit Court of Appeals has firmly established that syndicated term loans do not count as securities in the much-anticipated case of Kirschner v. JP Morgan Chase Bank N.A., et al.. The Court’s verdict upheld the decision of the district court, confirming the market’s longstanding interpretation…
A Connecticut-based attorney has filed a federal lawsuit alleging that two Colorado companies have failed to pay him for legal services and associated costs, totaling $107,000. The services were rendered in relation to securities lawsuits in both Florida and Illinois. One of the companies implicated in this controversy was reportedly in the process of establishing…
On August 23, 2023, the Securities and Exchange Commission (SEC) decidedly adopted new rules and amendments, collectively known as the “Final Rule”, as per the Investment Advisers Act of 1940. These rules impose new requirements on investment advisers to hedge funds, private equity funds, and certain other private funds. They apply to a large extent,…
On July 26, 2023, the U.S. Securities and Exchange Commission (SEC) proposed new conflict-of-interest rules targeting broker-dealers and investment advisers registered with the SEC. Aimed at regulating the use of artificial intelligence (AI), the majority of the Commissioners voted to instate these changes under the Securities Exchange Act of 1934 and the Investment Advisers Act…
In today’s financial regulation update, we highlight two significant developments made public on August 31, 2023. The U.S Department of the Treasury posted preliminary data from an annual survey focusing on U.S. portfolio holdings of foreign securities at year-end 2022. This regular survey gives insight into America’s financial dealings overseas and offers valuable data for…
In a landmark twist of events on August 28,2023, the Securities and Exchange Commission (SEC) made the headlines by instituting and settling an enforcement action against a media and entertainment company. The main accusation brought against this company was the ‘conducting of an unregistered offering of crypto asset securities in the form of purported non-fungible…
On August 23, 2023, the Securities and Exchange Commission (the SEC) enacted a set of new rules and amendments under the Investment Advisers Act of 1940, triggering noteworthy changes for private fund advisers (PFAs). According to a summary report by Thompson Coburn LLP, these final rules made several updates compared to the original proposal that…
In a split decision on August 23, 2023, the US Securities and Exchange Commission (SEC) adopted new and amended rules under the Investment Advisers Act of 1940. These will place additional demands on registered investment advisers and set limits on certain activities for all advisers to private funds, regardless of SEC registration status (Final Rules)….
On August 23, a significant development in the regulatory landscape for private funds was noticed when the United States Securities and Exchange Commission (the “SEC” or “Commission”) adopted rules and rule amendments (the “PFA Rules”) under the Investment Advisers Act of 1940 (the “Advisers Act”). These amendments impose a slew of new requirements and obligations…
The U.S. Securities and Exchange Commission (SEC) recently adopted new rules and rule amendments under the Investment Advisers Act of 1940. The changes will lead to heightened regulation for private fund advisers, playing directly into three of the SEC’s enforcement priorities aimed at investor protection and risk management. These enforcement priorities are transparency, conflicts of…
Venture capital (VC), a form of private equity, has increasingly become a go-to financing method for investors looking to invest in early-stage companies with perceived long-term, high-growth potential. As detailed in an insightful infographic provided by Lippes Mathias LLP, accredited investors, family offices, institutional investors and others often tap into this type of financing. The…
In a significant regulatory shift steered by the Securities and Exchange Commission (SEC), private fund advisors will be subject to new restrictions on assigning preferred rights to select investors, coupled with increased reporting obligations, including fairness opinions. An analysis by Reed Smith of the recent changes provides an insightful read for legal professionals interested in…
Concerns are mounting around the potential Initial Public Offering (IPO) of fast-fashion retail giant SHEIN, as confirmed by a recent report from Cozen O’Connor. Having amassed a reputation for its affiliation with China, the brand is now on the radar of some of America’s top lawmakers. In a collective action that has raised eyebrows in…
The U.S. Securities and Exchange Commission’s (SEC) concluded lawsuit against Impact Theory LLC is having unforeseen ramifications for the non-fungible token (NFT) sector, creating an intricate matrix of regulatory uncertainties. The claim centered on the notion that the media company accrued approximately $30 million via unregistered crypto asset securities. National Law Journal reports that this…
A lawsuit has been filed against Mitsubishi UFJ Morgan Stanley Securities by Tokyo-based Yamazaki Marunouchi Law Office, with proceedings lodged at the Tokyo District Court. This legal action represents 66 Credit Suisse Additional Tier 1 (AT1) bond investors, who are claiming approximately $36 million in compensation. Details regarding the case have been obtained from Law.com…
The United States Court of Appeals for the Second Circuit has recently passed a verdict decertifying a class of stockholders who had made allegations against Goldman Sachs. They claimed that the banking giant was maintaining an inflated share price by resorting to misrepresentations about its business principles and its policies related to conflicts-of-interest. The case…
In a novel enforcement movement against Non-Fungible Tokens (NFTs), the Securities and Exchange Commission (SEC) is gradually showing more interest in the otherwise hardly regulated field of digital assets. The action signifies a growing awareness of the need for regulatory oversight in this rapidly evolving sector. This development follows a cease-and-desist order, dated August 28,…
In a move likely to be of significant interest to corporate legal professionals, the U.S. Securities and Exchange Commission (SEC) adopted new regulations governing private fund advisers on August 23, 2023. The news, reported by Manatt, Phelps & Phillips, LLP, indicates that the divisive decision forms part of the SEC’s ongoing commitment to investor protection,…
With a careful and judicious approach to enforcement reform afoot in Hong Kong, legal professionals across the globe would do well to keep a close eye on developments. On 8 August 2023, the Securities and Futures Commission (SFC) in Hong Kong published its much-anticipated consultation conclusions on proposed amendments to enforcement-related provisions of the Securities…
In a notable development on August 28, 2023, the US Securities and Exchange Commission (SEC) declared a settled enforcement action against Impact Theory LLC. The decision held that the unregistered sale of non-fungible tokens (NFTs) by Impact Theory were deemed securities. The delineation of NFTs as securities sets a precedent in the regulatory landscape of…
In May, the U.S. Securities and Exchange Commission (SEC) introduced regulations aiming to refine and modernize the disclosure regarding company stock repurchases. The revision performed by SEC is particularly beneficial for domestic companies due to the simplification of reporting methods. The newly introduced rule eliminated the proposal for a new Form SR for the reporting…
With recent significant amendments to Rule 10b5-1 plan requirements, legal professionals find themselves navigating a transformed landscape, a shift sparked by the Justice Department’s announcement of its first criminal prosecution challenging a Rule 10b5-1 plan earlier this year. The increased attention regulators are now giving to the use of such plans has certainly put insiders…