Tag:SEC
SEC Launches Largest Regulatory Blitz Since the Great Recession, and Wall Street Readies for War: Part One of a Two Part Series
Securities and Exchange Commission (SEC) Chair, Gary Gensler, has introduced more regulatory proposals impacting market participants than former SEC Chair, Mary Schapiro, did in the same time frame following the Great Recession almost fifteen years ago. The SEC has formally adopted 22 of 47 regulatory proposals since 2021, and in August released extensive final rules targeting private funds. The new regulations in part require private fund advisors to increase disclosure to their investors regarding fees, expenses, and other terms of their relationship. Other new rules prohibit preferential treatment of some investors that may materially affect other investors in the same fund.
The Downfall of Cryptocurrency, and Celebrities
Cryptocurrency entered the mainstream economy in 2013 when Forbes listed Bitcoin as the best investment of that year, calling 2013 the “year of the bitcoin.” Then, in 2014, Bloomberg News made the statement that Bitcoin was one of the year’s worst investments. Since these early days, citizens and economists alike have remained skeptical of Bitcoin and other cryptocurrencies. Over the past few years, celebrities have gotten increasingly involved in “pushing cryptocurrency and non-fungible tokens at a speed once reserved for viral dances,” according to the Washington Post. In the wake of recent events, the Securities and Exchange Commission is beginning to crack down on celebrity endorsement that has gone too far.
Growing Banking Crisis: Silicon Valley Bank Failure
Founded in 1983, Silicon Valley Bank (SVB) is a midsize California-based lender that shook the foundation of the entire global financial system. Regulators closed SVB on March 10, making it the largest bank failure since the 2008 financial crisis and the second largest in U.S. history. While SVB offered various services from standard checking accounts to loans, it was primarily home to venture capitalists in the tech industry. Therefore, the majority of the corporate deposits were larger than the Federal Deposit Insurance Corporation’s (FDIC) $250,000 insurance limit, leaving over $150 billion in uninsured deposits at the end of 2022. The sudden collapse caused a frenzy leaving companies and investors vulnerable having already experienced mass layoffs in the tech industry.
U.S. Regulators are Employing New Strategies to Crack Down on Historically Challenging Insider Trading Cases
In the past, insider trading cases have been considered difficult to prove and prosecute. These cases usually require extensive evidence-gathering coupled with a high burden of proof. However, the Securities and Exchange Commission (SEC) and Justice Department are now turning to new developments in technology and regulatory efforts that have led to an increased focus on investigating and prosecuting insider trading cases. Why were these cases hard to prove in the past and what exactly are these new technologies?
Federal Response to the Collapse of Silicon Valley
The collapse of Silicon Valley Bank (SVB), the 16th-largest bank in the United States, in early March of this year is considered the biggest bank failure since the fall of Washington Mutual during the 2008 global financial crisis. After 40 years of success, the bank collapsed swiftly and unexpectedly. The collapse has ricocheted through the industry, provoking bank closures, rattling the global markets, and threatening the livelihood of startups. The Federal government has not only intervened and taken over the bank, but prosecutors and regulators from the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) have initiated preliminary investigations. Inevitably the collapse will cause regulators to revise the current banking rules and pursue stricter regulation in order to prevent the demise of other banks and a financial crisis.
Regulatory Scrutiny of Crypto Exchange “Binance” May Cause it to Leave the U.S.
State and federal regulators are opposing a billion-dollar deal between the cryptocurrency exchange Binance.US and the bankrupt cryptocurrency lender Voyager. The regulatory intervention is part of an ongoing struggle between Binance, the ultra-dominant cryptocurrency exchange, and U.S. regulators. Tensions between the two appear to be nearing a boiling point. The dispute also highlights an American regulatory environment that is increasingly hostile toward the cryptocurrency industry writ large, particularly in the wake of the FTX cryptocurrency exchange collapse.
Crypto Platforms Under Scrutiny by Various U.S. Agencies
Since the beginning of 2023, the cryptocurrency market has faced legal action from multiple U.S. agencies in efforts to control a sector that, until recently, mostly operated beyond the bounds of conventional financial regulation. As a result of the executive order issued by the Biden Administration in March 2022, various federal agencies examined the risk and benefits of cryptocurrencies and have issued official reports. These reports have led to coordinated action against the crypto market. The administration aims to “ensure that cryptocurrencies cannot undermine financial stability, to protect investors, and to hold bad actors accountable.” In their attempts to promote regulation, the Securities and Exchange Commission (SEC), the Department of Justice (DOJ), and the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury, have acted against the crypto market on several fronts, frightening off bank allies, suing crypto firms for violating investor protection laws, and targeting exchanges connected to money laundering.
Kraken Settles with the SEC in a $30 Million Deal
Sophie Shapiro Associate Editor Loyola University Chicago School of Law, JD 2024 Kraken will pay $30 million to settle SEC (Securities and Exchange Commission) allegations that it broke the agency’s rules with its cryptoasset staking products and will discontinue them in the United States as part of the agreement with the regulator. What is Kraken? …
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A Blizzard of Controversy: Activision-Blizzard Settles with the SEC Amid Controversy
A Blizzard of Controversy: Activision-Blizzard Settles with the SEC Amid Controversy Jacob Taylor Associate Blogger Loyola University Chicago School of Law, JD 2024 Activision-Blizzard became one of the largest gaming companies in the world after the merger between the two companies in 2008. The company is known for its games, and more recently for …
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The SEC’s Second Attempt to Fix a 10-Year-Old Problem
The 2008 financial collapse occurred when banks began substantially increasing access to debt. They offered adjustable-rate mortgages to borrowers who could afford the initial mortgage payments, but would end up defaulting on the loans when their adjustable interest rates kicked in. The banks then subsequently packaged these high-risk loans together and sold them as securities to mutual funds, investment banks, and pension funds. When most of these high-risk loans defaulted, the market crashed. The recession that followed cost the public thousands of jobs, homes, and retirement accounts.