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☆ Court Strikes Down S.E.C.’s Fee Disclosure Rule for Funds
▼ + stars: | 2024-06-05 | by ( Matthew Goldstein | More About Matthew Goldstein | ) www.nytimes.com time to read: +1 min

A federal appellate court on Wednesday struck down a Securities and Exchange Commission rule intended to provide investors in hedge funds, private equity funds and venture capital firms with more information about fees and expenses. The unanimous decision from the U.S. Court of Appeals for the Fifth Circuit in New Orleans sided with a group of associations representing the private fund industry in ruling that the S.E.C. exceeded its authority with the rule, which was enacted in August. In its decision, the appeals court agreed with their argument, saying that the regulator had overstepped with its rule, which was based on a law meant to protect everyday investors, who typically invest in mutual funds and other public securities, rather than investors in hedge fund and private equity firms. said in a statement that it was reviewing the decision and would “ determine next steps as appropriate.”

Organizations: Securities and Exchange Commission, U.S ., Appeals, Fifth Circuit Locations: New Orleans

☆ Auditor That Works for Trump Media Is Charged With Fraud
▼ + stars: | 2024-05-03 | by ( Matthew Goldstein | More About Matthew Goldstein | ) www.nytimes.com time to read: +1 min

An accounting firm that audits the financial statements of hundreds of public companies including former President Donald J. Trump’s social media company can no longer do so, U.S. securities regulators said on Friday. The Securities and Exchange Commission charged the firm, BF Borgers, with fraud, saying that it had failed to comply with accounting rules. The regulator held BF Borgers and its owner, Benjamin F. Borger, responsible for “deliberate and systemic failures” to comply with accounting rules. Many companies that used BF Borgers must now find new auditors. Trump Media & Technology Group, the parent company of the Truth Social platform, has been a client of BF Borgers since 2022, according to regulatory filings.

Persons: Donald J, BF, Benjamin F, Borgers Organizations: Securities, Exchange Commission, Trump Media & Technology Group, Trump Media Locations: U.S, Borger

☆ Truth Social Co-Founder Says Trump Nearly Derailed Deal That Led to Market Windfall
▼ + stars: | 2024-05-01 | by ( Matthew Goldstein | More About Matthew Goldstein | ) www.nytimes.com time to read: +1 min

Former President Donald J. Trump’s social media company is currently worth over $6 billion. But the agreement that set the stage for its stock market debut in March was nearly derailed years earlier by Mr. Trump, who is now the biggest beneficiary of its richly valued stock, one of the firm’s co-founders said on Wednesday. Andy Litinsky, who helped start Trump Media & Technology Group, the parent company of Truth Social, testified in federal court that he had doubts about whether Mr. Trump would agree to take the firm public by merging it with a cash-rich shell company, even as the deal-signing ceremony was set to take place at the former president’s Mar-a-Lago residence in late 2021. Mr. Litinsky, a former contestant on Mr. Trump’s reality television show “The Apprentice,” said that before the ceremony, Mr. Trump had asked him whether he should go ahead with the merger of Trump Media and the shell company, Digital World Acquisition Corporation. Mr. Litinsky was in court in Manhattan testifying as a witness in an insider trading trial that arose from an investigation of traders who made millions of dollars with well-timed purchases of Digital World’s stock before the merger announcement on Oct. 20, 2021.

Persons: Donald J, Trump, Andy Litinsky, Litinsky, ” Organizations: Trump Media & Technology Group, Truth, Trump Media, Acquisition, Mr, Digital Locations: Manhattan

For more than a decade, the pioneers of the cryptocurrency industry envisioned digital coins as an alternate branch of finance, a renegade sector that would operate outside the reach of big banks and government regulators. In recent years, regulators have seized on that legal precedent to argue that cryptocurrencies are just another security, like shares of Apple or General Motors. The crypto industry has fought back, leaving it in a legal gray zone with an uncertain future in the United States. Now the long-running dispute is edging closer to a resolution, as federal judges begin weighing in on a series of lawsuits by the nation’s top securities regulator against some of the largest crypto firms. This month, judges held hearings in two of the most consequential cases, which could dictate whether the multitrillion-dollar crypto industry can continue growing in the United States.

Organizations: Apple, General Motors Locations: United States

Customers from Iran, Cuba and Syria — all of which face sanctions — were able to access the Binance platform. In addition to the outlawed foreign transactions, Binance did business with firms based in the United States even though it was not supposed to have any U.S. customers on its Binance.com platform. Instead, a different platform, Binance.US, which Mr. Zhao also owned, was required to handle the business and abide by U.S. anti-money laundering laws. But Mr. Zhao and other Binance employees believed it would be better for the main cryptocurrency exchange to handle big U.S. customers, the court filings state. At times, Binance has processed two-thirds of all digital currency trades, making it a vital power broker and intermediary in the crypto world.

Persons: Zhao, Binance, —, ” Locations: Iran, Cuba, Syria, United States

☆ Trump’s Truth Social Platform Could Struggle to Survive Without New Cash
▼ + stars: | 2023-11-16 | by ( Matthew Goldstein | More About Matthew Goldstein | ) www.nytimes.com time to read: +1 min

Former President Donald J. Trump’s social media company is running on fumes and could be at risk of folding if it doesn’t find new funds in a hurry. In a regulatory filing this week, auditors for Trump Media & Technology Group expressed doubt about the company’s ability to continue as a “going concern” without new financing. The filing also made clear that Trump Media desperately needs to complete its long-delayed merger with a cash-rich shell company so that it can tap $300 million in cash, especially if its flagship online platform, Truth Social, has any chance of surviving. If the transaction goes through, it could value Trump Media at $1 billion based on Digital World’s share price of $16.60. Yet, the rich valuation is no guarantee that the company, which largely relies on advertising revenue from Truth Social — and Truth Social itself — will be a viable business.

Persons: Donald J Organizations: Trump Media & Technology Group, Trump Media, Trump, Acquisition Corporation, Truth

☆ Judge Approves JPMorgan’s $290 Million Settlement With Epstein Victims
▼ + stars: | 2023-11-09 | by ( Matthew Goldstein | More About Matthew Goldstein | ) www.nytimes.com time to read: +1 min

A federal judge on Thursday approved a settlement of a class-action lawsuit in which JPMorgan Chase will pay $290 million to sexual abuse victims of Jeffrey Epstein who claimed that the bank ignored warnings about the disgraced financier. The money being paid by JPMorgan, the nation’s biggest bank, could provide compensation to nearly 200 victims of Mr. Epstein, according to a legal filing. JPMorgan and lawyers for the victims reached a preliminary settlement in June, averting a potential civil trial in federal court in Manhattan. The judge, Jed Rakoff, gave final approval to the deal after holding an afternoon hearing to assess the fairness of the settlement to the victims. Some, including one who said she was just 13 when Mr. Epstein first sexually assaulted her, wrote about continuing to suffer from depression, anxiety, panic attacks and eating disorders.

Persons: Jeffrey Epstein, Epstein, Jed Rakoff Organizations: JPMorgan Chase, JPMorgan Locations: Manhattan

Sam Bankman-Fried, the tousle-haired mogul who founded the FTX cryptocurrency exchange, was convicted on Thursday of seven charges of fraud and conspiracy after a monthlong trial that laid bare the rampant hubris and risk-taking across the crypto industry. Mr. Bankman-Fried became a symbol of crypto’s excesses last year when FTX collapsed and he was charged with stealing as much as $10 billion from customers to finance political contributions, venture capital investments and other extravagant spending. A jury of nine women and three men took more than four hours of deliberation on Thursday to reach a verdict, convicting Mr. Bankman-Fried of wire fraud and conspiracy. Together the counts carry a maximum sentence of 110 years. Mr. Bankman-Fried, 31, is expected to appeal.

Persons: Sam Bankman, Fried, FTX, convicting Mr, He’s

Sam Bankman Fried, the onetime cryptocurrency mogul, built his FTX crypto exchange into a “pyramid of deceit” resting on a “foundation of lies and false promises,” a federal prosecutor said in closing arguments on Wednesday at the criminal fraud trial. Over more than two hours in a Manhattan courtroom in the morning, Nicolas Roos, the prosecutor, used scathing language to paint Mr. Bankman-Fried as a liar and fraudster. And Mr. Bankman-Fried, who had testified during the trial in his own defense, had repeatedly dissembled and dodged questions, Mr. Roos said. Mr. Bankman-Fried “lied about big things and small things,” the prosecutor said, pointing out that the defendant said he “couldn’t recall” more than 140 times in response to questions on cross-examination. “It was uncomfortable to hear,” Mr. Roos said.

Persons: Sam Bankman Fried, ”, Nicolas Roos, Roos, dissembled, Fried “, “, Mr, Bankman Organizations: Mr Locations: Manhattan

The 31-year-old onetime crypto mogul fumbled for an answer when the prosecutor, Danielle Sassoon, repeatedly asked whether he had told his employees not to spend FTX customer money on investments, pricey real estate and other expenditures. Mr. Bankman-Fried also couldn’t name any employees who might have authorized the use of FTX customer money for that spending. “I don’t recall giving any direction,” Mr. Bankman-Fried said three times about the spending of FTX customer money before he concluded his testimony. Both sides rested their case before lunchtime on Tuesday, with closing statements set to unfold on Wednesday. Mr. Bankman-Fried was on the stand for a third day testifying before a jury in his own defense for a trial that has come to symbolize the highs and lows of the volatile crypto industry.

Persons: Sam Bankman, Danielle Sassoon, Fried, ” Mr Organizations: Alameda Research Locations: Alameda

“I’m not sure,” he responded over and over, as Ms. Sassoon asked about statements he had made when he was chief executive of FTX. Ms. Sassoon displayed statements that appeared to show Mr. Bankman-Fried saying one thing in public, then acting differently in private. Criminal defendants usually avoid testifying so that prosecutors don’t have a chance to question them. In December, federal prosecutors charged Mr. Bankman-Fried with orchestrating a sweeping scheme to steal as much as $10 billion from FTX’s customers. Mr. Bankman-Fried was also accused of creating a secret backdoor in FTX’s code that allowed Alameda to seize billions of dollars in customer funds.

Persons: “ I’m, ”, Sassoon, Bankman, Elizabeth Holmes, don’t, FTX, Fried Locations: Washington, Bahamas, Alameda

From the moment his cryptocurrency empire collapsed in November, Sam Bankman-Fried didn’t stop talking. Against the advice of his defense lawyers, Mr. Bankman-Fried embarked on a lengthy press tour to explain the failure of his FTX cryptocurrency exchange, giving interviews to TV anchors and obscure Twitter personalities. On Friday, Mr. Bankman-Fried, 31, made an even riskier call: He took the stand to testify at his criminal fraud trial in federal court in New York. But he also acknowledged that he had made missteps, citing “significant oversights” that hurt FTX customers. Wearing a gray suit and purple tie, his famously tousled hair cut short by a fellow inmate at the Brooklyn jail where he is detained, Mr. Bankman-Fried said he “made a number of small mistakes, and a number of larger mistakes.”

Persons: Sam Bankman, Fried, “ Organizations: Brooklyn Locations: New York

The wait for Sam Bankman-Fried’s testimony will be a little longer. Judge Lewis A. Kaplan, who is overseeing the disgraced crypto mogul’s federal criminal trial, sent jurors home on Thursday afternoon just before Mr. Bankman-Fried was expected to take the stand. Judge Kaplan opted instead for a hearing to discuss pending testimony from Mr. Bankman-Fried, who founded the FTX cryptocurrency exchange, with regard to his reliance on company lawyers in making decisions. The jury will return on Friday, when Mr. Bankman-Fried is expected to testify. Mr. Bankman-Fried, 31, has pleaded not guilty to seven counts of fraud, conspiracy and money laundering.

Persons: Sam Bankman, Judge Lewis A, Kaplan, Fried, Judge Kaplan, FTX

Over the past three weeks, former employees and friends of Sam Bankman-Fried have testified that he orchestrated a scheme to misappropriate billions of dollars in customer money from his FTX cryptocurrency exchange, which collapsed last year. The witnesses have painted a portrait of Mr. Bankman-Fried, 31, as a controlling boss who directed them to commit fraud. They said the FTX founder had known for months that the exchange had no way of paying back at least $8 billion in customer money that was used to buy lavish real estate, invest in other crypto companies, make campaign contributions and pay back lenders to a trading firm that Mr. Bankman-Fried also controlled. Here are highlights of the testimony from several prosecution witnesses — including Mr. Bankman-Fried’s employee and on-again, off-again girlfriend, Caroline Ellison — who have been central to the case:Adam YedidiaThe first prosecution witness was Adam Yedidia, a former FTX developer who was a close friend of Mr. Bankman-Fried’s and lived with him and other associates in the Bahamas. Mr. Yedidia, who has not been charged with any crimes and testified under immunity, said Mr. Bankman-Fried had known that FTX and Alameda Research, a sister crypto trading firm, were on thin ice.

Persons: Sam Bankman, Fried, Bankman, Caroline Ellison —, Adam Yedidia, Mr, Yedidia Organizations: Alameda Research Locations: Bahamas

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, is planning to testify at his criminal fraud trial in Manhattan, his lawyer said on Wednesday. Mr. Bankman-Fried, 31, is likely to begin testifying on Thursday, after federal prosecutors call their final witness in the morning. “Our client is going to be testifying,” Mr. Cohen said at the hearing. Mr. Bankman-Fried is charged with orchestrating a sweeping scheme to steal as much as $10 billion in deposits from customers of FTX. Mr. Bankman-Fried has pleaded not guilty to seven charges of fraud, conspiracy and money laundering.

Persons: Sam Bankman, Mark Cohen, Bankman, ” Mr, Cohen, Fried Organizations: Prosecutors Locations: Manhattan, FTX

On the second day of Sam Bankman-Fried’s fraud trial this month, one of the lawyers for the cryptocurrency mogul delivered an emphatic message to the jury. He lied repeatedly, they said, running roughshod over his top lieutenants and directing them to treat customer deposits as if FTX were a piggy bank. The testimony has dealt a blow to Mr. Bankman-Fried’s “good faith” defense, which will be put to the test this week. At a hearing on Wednesday, Mark Cohen, a defense lawyer, confirmed that Mr. Bankman-Fried, 31, would take the stand. But given the prosecution’s success in building its case, legal experts said, it was all but inevitable that Mr. Bankman-Fried would want to tell the jury his side of the story.

Persons: Sam Bankman, FTX, Bankman, Mark Cohen Locations: Manhattan

Follow live updates on the Sam Bankman-Fried fraud trial. A year ago, Sam Bankman-Fried was a fixture on magazine covers and in the halls of Congress, a tousle-haired crypto billionaire who hobnobbed with movie stars and bankrolled political campaigns. The charges against Mr. Bankman-Fried, 31, have put the rest of the crypto industry on trial with him. He has emerged as a symbol of the unrestrained hubris and shady deal-making that turned cryptocurrencies into a multitrillion-dollar industry during the pandemic. The demise of FTX in November helped burst that bubble, sending other high-profile companies into bankruptcy and provoking a government crackdown.

Persons: Sam Bankman, Fried Locations: Manhattan

☆ JPMorgan Settles Epstein Suits With U.S. Virgin Islands and James Staley
▼ + stars: | 2023-09-26 | by ( Matthew Goldstein | More About Matthew Goldstein | ) www.nytimes.com time to read: +1 min

The U.S. Virgin Islands sued JPMorgan in December, and about a month later, lawyers for Mr. Epstein’s victims had sued the bank. The money the bank is paying to the Virgin Islands, where Mr. Epstein had a private island residence for roughly two decades, will mostly go toward funding charitable causes in the U.S. territory in the Caribbean and paying lawyer fees. Mr. Epstein killed himself in a federal jail in Manhattan in August 2019, a month after he had was arrested on federal sex trafficking charges. Mr. Epstein had been a client of JPMorgan both before and after he pleaded guilty in 2008 to a charge of soliciting prostitution from a teenage girl and had to register as a sex offender in New York, Florida and the Virgin Islands. The parties, however, took issue with how each side had characterized some of the terms of the settlement in their respective news releases.

Persons: Epstein Organizations: U.S . Virgin Islands, JPMorgan Locations: U.S, Caribbean, Manhattan, New York , Florida, Virgin

☆ Regulators Charge Money Manager Tied to Russian Oligarch
▼ + stars: | 2023-09-19 | by ( Matthew Goldstein | More About Matthew Goldstein | ) www.nytimes.com time to read: +1 min

The sanctions forced Mr. Abramovich to sell the Chelsea Football Club, the famed London soccer team. Authorities also froze more than $13 billion in assets held by financial institutions in Britain, the Cayman Islands, the Isle of Jersey and the British Virgin Islands. In June last year, the United States seized two jets believed to be owned by Mr. Abramovich. complaint covers activity beginning in 2012 when, the regulator said, the firm and Mr. Matlin, now 59, should have registered as investment advisers. The regulator said that over the next decade, the firm and Mr. Matlin had taken in $85 million in compensation.

Persons: Abramovich, Matlin, Concord, Gurbir, Grewal, ’, ” Jon Hammond, Michael Matlin Organizations: Chelsea Football Club, London, Authorities, British Virgin Islands, Concord, Concord Management Locations: Britain, Cayman Islands, Isle of Jersey, British Virgin, United States, Concord, British Virgin Islands, Jersey

☆ Senate Republicans Grill S.E.C. Chair on Pace of Rule Making
▼ + stars: | 2023-09-12 | by ( Matthew Goldstein | More About Matthew Goldstein | ) www.nytimes.com time to read: +1 min

Mr. Gensler said the S.E.C. A rule governing climate change disclosures has been delayed, Mr. Gensler said, partly because the S.E.C. “We’re updating our rules to promote the efficiency, integrity and resiliency of the markets,” said Mr. Gensler, who appeared before the committee for about two hours. In response to questions about digital assets, Mr. Gensler said the cryptocurrency market faced “significant noncompliance” and was “rife for fraud.”The most heated moment of the hearing came when Senator J.D. “Have you ever spoken to anyone at the White House about your investigation of Donald Trump’s Truth Social?” Mr. Vance asked Mr. Gensler.

Persons: Gensler, ”, J.D, Vance, Mr, Donald J, “, Donald Trump’s Organizations: Republican, Truth, Trump, White House Locations: Ohio

A diet of bread, water and peanut butter. A laptop with no internet connection. Sam Bankman-Fried, the 31-year-old cryptocurrency mogul, has spent nearly a month at the Metropolitan Detention Center in Brooklyn since a federal judge revoked his bail in August. They have also said he has not been getting enough access to the internet to prepare for his trial and should be released. They did not reach a resolution, leaving it for the judge to decide.

Persons: Sam Bankman, Fried, FTX, Bankman Organizations: Metropolitan Detention Locations: Brooklyn, Bahamas

☆ Trump Media Buyer Gets More Time to Complete Long-Delayed Merger
▼ + stars: | 2023-09-05 | by ( Matthew Goldstein | More About Matthew Goldstein | ) www.nytimes.com time to read: +1 min

Shareholders of a cash-rich shell company approved a measure on Tuesday that will give the firm 12 additional months to complete its long-delayed merger with former President Donald J. Trump’s social media company. The shareholder vote increases the likelihood that Trump Media & Technology Group will get access to at least $300 million in badly needed cash to operate Truth Social — a right-leaning social media platform. Online ads on the social media platform also account for a critical piece of Mr. Trump’s fund-raising effort for his 2024 presidential campaign. The shell company, Digital World Acquisition Corp., raised the $300 million in a September 2021 initial public offering. A little over a month later, the company, set up as a special purpose acquisition company, or SPAC, announced the deal to merge with Trump Media.

Persons: Donald J, Trump’s Organizations: Trump Media & Technology Group, Trump Media

☆ Shell Company Seeks to Extend Deadline for Merger With Trump Media
▼ + stars: | 2023-08-17 | by ( Matthew Goldstein | More About Matthew Goldstein | ) www.nytimes.com time to read: +1 min

The shell company seeking to merge with former President Donald J. Trump’s social media company announced late Wednesday that it had postponed a crucial meeting of shareholders scheduled for Thursday, at which it hoped to announce that investors had agreed to give it more time to complete its long-delayed deal. The company is now giving shareholders until Sept. 5 to approve the measure to give it more time to complete the deal with Trump Media & Technology Group. That is just three days before the shell company, Digital World Acquisition Corp., would be forced to begin to liquidate and return the $300 million it raised from investors in a September 2021 initial public offering. Digital World was set up as a special purpose acquisition vehicle, or SPAC, which raises money by going public to finance a future merger — in this case, Trump Media. The merger was announced on Oct. 21, 2021, and Digital World now is trying to get 65 percent of its roughly 400,000 shareholders to approve the extension for the deal.

Persons: Donald J Organizations: Trump Media & Technology, Trump Media, Securities and Exchange Commission

☆ UBS to Pay $1.4 Billion to Settle Financial-Crisis Fraud Case
▼ + stars: | 2023-08-14 | by ( Matthew Goldstein | More About Matthew Goldstein | ) www.nytimes.com time to read: +1 min

The Swiss-banking giant UBS agreed on Monday to pay $1.4 billion to settle U.S. claims that it misrepresented bonds backed by mortgages sold in the years leading up to the 2008 financial crisis, a sign that the legacy of the turmoil that engulfed the global financial system continues to haunt Wall Street. The settlement with UBS is the last action brought by a Justice Department task force that was set up in 2012, during the Obama administration. It investigated the role of big banks and other financial firms in selling flawed and predatory mortgage products that contributed to the collapse of the U.S. housing market, federal prosecutors in Brooklyn said in a news release. “The substantial civil penalty in this case serves as a warning to other players in the financial markets who seek to unlawfully profit through fraud that we will hold them accountable no matter how long it takes,” said Breon Peace, U.S. attorney for the Eastern District of New York. UBS said in a statement on its website that it had reached the settlement with federal prosecutors to resolve “a legacy matter,” adding that the money had already been accounted for in previous financial statements.

Persons: Obama, ” Organizations: UBS, Justice Department, Eastern, of Locations: Swiss, Brooklyn, U.S, of New York

Sam Bankman-Fried, the founder of the collapsed cryptocurrency exchange FTX, was ordered to jail on Friday after a federal judge in New York revoked his bail, in a dramatic twist less than two months before the case was set to go to trial. Mr. Bankman-Fried, 31, had been under house arrest at his parents’ home in Palo Alto, Calif., since he was arrested in December on fraud charges stemming from FTX’s implosion. The decision was the latest extraordinary development in one of the most dramatic corporate implosions in recent memory. Over just a few weeks, Mr. Bankman-Fried went from an industry titan courted by politicians and celebrities to a criminal defendant facing decades in prison. Ms. Ellison has pleaded guilty to fraud charges and agreed to cooperate with the prosecutors investigating Mr. Bankman-Fried.

Persons: Sam Bankman, ’, Judge Lewis A, Kaplan, Fried, FTX, Caroline Ellison, Bankman, Ellison Organizations: Federal, Court, New York Times Locations: New York, Palo Alto, Calif, Manhattan

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