“Shadow Trading” Becomes Insider Trading

On January 14, 2022, the U.S. District Court in San Francisco denied a motion to dismiss charges filed by the Securities and Exchange Commission under an expansive new theory of insider trading liability. In a matter of first impression, the court ruled in SEC v. Panuwat[1] that a defendant with material nonpublic information (“MNPI”) about an issuer may incur insider trading liability by trading in the securities of a different and unrelated issuer that could possibly be affected by public announcement of the first issuer’s MNPI. As discussed below, this new insider trading theory – now being called “shadow … Read more

Asking the Hard Questions: A Review of Prof. John Coffee’s New Book, Corporate Crime and Punishment

Columbia Law Professor John C. Coffee, Jr.’s Corporate Crime and Punishment delivers a hard-hitting and provocative analysis of the securities law enforcement landscape and the choices that lie ahead.  With SEC senior staff changes probable in any new administration, Coffee’s perspective is particularly well-timed.  Overall, this is a book designed to make us strongly disagree about important issues in a very good and productive way – a book that all who genuinely care about securities enforcement need to read, whatever their own views.

Coffee’s central thesis is that corporate America is undergoing a “crisis of underenforcement” marked by lenient resolutions … Read more

SEC Discusses Online Trading Platforms — With a Word of Caution

On March 7, 2018, the Securities and Exchange Commission’s Enforcement Division and its Trading & Markets Division issued a joint “Statement on Potentially Unlawful Online Platforms for Trading Digital Assets.”[1]  The release appeared to be the strongest signal yet of a broadening of the SEC’s enforcement and regulatory interest beyond its focus over the last year on the need for certain coin offerings to be registered or to qualify for an exemption as private placements.

The SEC staff’s release provided a laundry list of potential regulatory pitfalls for digital asset trading platforms and urged market participants to exercise caution … Read more