Daily Archives: February 2, 2023, 7:55 pm

Silvergate Faces US Fraud Probe Over FTX, Alameda Crypto Dealings – Bloomberg

US prosecutors in the Justice Department’s fraud unit are looking into Silvergate Capital Corp.’s dealings with fallen crypto giants FTX and Alameda Research, according to people familiar with the matter. The criminal investigation is examining Silvergate’s hosting of accounts tied to Sam Bankman-Fried’s businesses, said the people who asked not to be identified to discuss the confidential probe. The review…

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Using ETFs to Conceal Insider Trading by Elza Eglite, Dans Štaermans, Vinay Patel and Talis Putninš — SSRN

We show that exchange traded funds (ETFs) are used in a new form of insider trading known as “shadow trading.” Our evidence suggests that some traders in possession of material non-public information about upcoming M&A announcements trade in ETFs that contain the target stock, rather than trading the underlying company shares, thereby concealing their insider trading. Using bootstrap techniques to…

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Shadow ETF trading – Bloomberg

But another question you might have is: Does shadow trading happen a lot? Are there a ton of corporate insiders and deal advisers who are regularly making shadow trades in order to profit from inside information? Some casual empirical data: Very few people get caught shadow trading; I can only really think of the one enforcement action. This could mean that it is very rare,…

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House Subcommittee on Digital Assets Includes Crypto-Friendly Lawmakers

In one of his first moves as chair of the House Financial Services Committee, Rep. Patrick McHenry (R., N.C.) created a subcommittee on digital assets, financial technology and inclusion. The panel was formed as lawmakers are scrutinizing the industry after trading platform FTX’s implosion last year. Mr. McHenry has said Congress should create a regulatory framework that allows crypto to…

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WhatsApp Probe Hits Big Hedge Funds as SEC Asks for Phone Review – Bloomberg

Major hedge funds have been asked by US regulators to review certain employees’ personal mobile phones as part of a mushrooming probe into Wall Street’s use of unofficial messaging platforms like WhatsApp to conduct business. The Securities and Exchange Commission recently asked Steve Cohen’s Point72 Asset Management, Ken Griffin’s Citadel and several other firms to search through the devices for…

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UK unveils wide-ranging plans to regulate crypto industry | Financial Times

The UK has set out a sweeping new regulatory regime for the cryptocurrency industry that aims to bring the rules governing the issuance, trading and lending of crypto tokens closely into line with those for traditional financial assets such as stocks and bonds. The proposals to “robustly” regulate the sector, which are subject to a consultation, are the clearest sign…

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Coinbase wins dismissal of lawsuit claiming it sold tokens illegally | Reuters

A U.S. judge on Wednesday dismissed a proposed class action lawsuit by Coinbase Global Inc customers who accused the cryptocurrency exchange of selling unregistered securities and failing to register as a broker-dealer. U.S. District Judge Paul Engelmayer in Manhattan said customers who transacted on the Coinbase and Coinbase Pro trading platforms could not show that the company sold or held…

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Why America Should Ban Crypto – WSJ

In the U.S. in recent years, privately owned companies have issued thousands of new cryptocurrencies, large and small. These have later become publicly traded without any governmental pre-approval of disclosures. *** Such wretched excess has gone on because there is a gap in regulation. A cryptocurrency is not a currency, not a commodity, and not a security. Instead, it’s a…

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Proskauer Welcomes Litigation Partner Robert Pommer – Proskauer Rose LLP

Proskauer, a leading international law firm, is pleased to welcome Robert (Bob) Pommer as a partner in its Litigation Department. Bob has deep securities-related enforcement and compliance experience and will bolster the Firm’s securities litigation and regulatory enforcement capabilities for asset managers. He will be based in Proskauer’s Washington, D.C. office. Source: Proskauer Welcomes Litigation Partner Robert Pommer – Proskauer…

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Ex-PWC Partner Accused of Shocking Confidentiality Breach In Banker Meeting – Bloomberg

PricewaterhouseCoopers LLP is facing allegations of a “shocking breach” of confidentiality by one of its former partners over a “quiet coffee” with a banker. The ex-partner held an “illicit meeting” with a banker advising law firm Slater & Gordon Ltd. spilling details of strategy and financial conditions of the then distressed Quindell Plc, now called Watchstone Group Plc., lawyers for…

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