Since 2015, the SEC has brought nearly two dozen enforcement actions for violations of the whistleblower protection rules under Rule 21F-17(a) against employers for actions taken to impede reporting to the SEC. The bulk of these actions have focused on language in employee-facing agreements that allegedly discouraged such reporting.The SEC
Second Circuit Holds That the Syndicated Term Loans in Kirschner Are Not Securities
By Robert Pommer & Robert Sutton on
On August 24, 2023, the Second Circuit Court of Appeals issued its much-anticipated decision in Kirschner v. JP Morgan Chase Bank, holding that the syndicate term loans at issue were not securities. As noted in our earlier blog post, the SEC declined the court’s request to file an…
Second Circuit Clarifies Nature of Actionable Opinions Under Securities Laws
By Jonathan Richman on
The U.S. Court of Appeals for the Second Circuit held that a statement of opinion that reflects some subjective judgment can nevertheless be actionable under the securities laws if it misleads investors into thinking that the issuer had historical or factual support for the judgment made. But the court also held that corporate officers’ certifications of financial statements are nonactionable opinions in the absence of allegations that the officers either did not believe their certifications or knew that the financial statements were false or misleading.
Are Syndicated Term Loans Securities? The SEC Declines to Weigh in on Kirschner
By Robert Pommer & Robert Sutton on
Participants in the syndicated loan markets may have been relieved last month when the SEC declined to file the amicus brief requested by the Second Circuit Court of Appeals in Kirschner v. JP Morgan Chase Bank. In an unusual turn of events, the SEC choose not to weigh…
The Crypto Wars Escalate
The gloves are off. The SEC’s recent enforcement actions against leading crypto exchanges suggest that the SEC has decided that time’s up for the crypto industry as it currently exists in the United States.
After spending years urging industry participants to come in and register, the SEC has made clear, by going after some of the biggest players in the space, that it does not intend to tolerate exchange operators’ offering of unregistered crypto trading in the United States, at least as to retail investors where the tokens are securities. From the SEC’s perspective, most crypto tokens are securities, so, if a company wants to provide the securities-like infrastructure to trade those tokens, it must be registered with the SEC – whether as an exchange (matching buyers and sellers), a broker-dealer (trading crypto on behalf of others), or a clearing agency (facilitating trade settlement).
SEC Issues Largest Whistleblower Bounty Award Ever To One Individual
As we reported here, on May 5, 2023, the SEC issued an award of $279 million to a whistleblower. This is the largest award the SEC has issued to an individual whistleblower in the history of the SEC Office of the Whistleblower’s program.
Supreme Court Holds that Constitutional Challenges to Administrative Agencies’ Structure Can Be Brought in District Court
By Jonathan Richman on
The Supreme Court held today that constitutional challenges to administrative agencies’ structure can be brought in federal district court and need not be raised through an administrative proceeding with subsequent appellate review. The decision in Axon Enterprise, Inc. v. Federal Trade Commission (U.S. Apr. 14, 2023) – which involved challenges to two federal agencies’ use of Administrative Law Judges (“ALJs”) for enforcement proceedings – considered only the issue of where such challenges can be brought. The Court did not address substantive questions about whether the ALJ process or the agency structure itself is constitutional – hot topics that could come before the Court in other matters.