Regulations May Be Coming For Cryptocurrency ‘Staking’
John Wu, the President of Ava labs, believes that securities regulations for cryptocurrencies utilizing "staking" could be coming in the future. This comes on the heels of Securities and Exchange Commission Gary Gensler signaling that the recent Ethereum "Merge" could lead to securities regulation.[1] [1] Lydia Beyoud, SEC Chair Gensler Raises ...
SEC Seeks To Obtain Penalties Greater Than A Defendants’ Gain
The U.S. Securities and Exchange Commission ("SEC") is seeking a ruling in the Ninth Circuit Court of Appeals upholding a fine larger than what a defendant individually gained from an allegedly illegal scheme. According to Bloomberg Law, the SEC obtained a ruling in SEC v. Imran Husain, et al., No. 16-cv-03250 (C.D. Cal.), that imposed "a ...
Garden Leave Slowly Gains Traction in the United States
A non-compete agreement is an agreement or clause in a contract specifying that an employee must not work for a competitor or enter into business in competition with the employer during or after employment. Non-competes are used to protect company trade secrets and client relationships. Eleven states in the United States ban non-competes for ...
SEC’s Draft Fiscal Years 2022-2026 Strategic Plan Is Available for Public Comment
On August 24th of this year, the Securities and Exchange Commission ("SEC") released for public comment its draft strategic plan for the fiscal years 2022 to 2026. Prepared pursuant to the Government Performance and Results Modernization Act of 2010, the draft strategic plan lists three primary goals: • Protecting working families against ...
New York City Passes Landmark AI Bias Law, with Similar Legislation Across the Country Likely on the Rise
New York City will soon enact novel legislation, Local Law Int. No. 1894-A, aimed at curbing bias in hiring and promotion decisions aided by artificial intelligence ("AI"), which has increasingly been employed by businesses in recent years. The new law, which requires employers to conduct an independent audit of the automated tools they use, ...
Fourth Circuit Holds that Transgender People Suffering from Gender Dysphoria are Entitled to Protections Under American with Disabilities Act
The Fourth Circuit recently held that people suffering from gender dysphoria qualify for protections under the American with Disabilities Act ("ADA"). The ADA protects people who suffer from disabilities. Under the ADA, "disability" is broadly defined to include "a physical or mental impairment that substantially limits one or more major life ...
Apple Likely to Face Antitrust Lawsuit by the Department of Justice
As reported recently by Politico and TechCrunch, the Department of Justice ("DOJ") is likely drafting an antitrust lawsuit against Apple Inc., potentially related to its dominance and control of its App Store, as well as other aspects of its business. Confidential sources suggest that the lawsuit may be filed by the end of this year. According ...
Eleventh Circuit Holds That Certain Yearly Estimates Are Forward Looking Statements
On August 1, 2022, the Eleventh Circuit affirmed dismissal of a putative securities class action against medical technology company Axogen, Inc. ("Axogen") ruling that certain yearly estimates about the number of injuries requiring a medical procedure were "forward-looking statements" protected by the Private Securities Litigation Reform Act ...
New Jersey High Court Rules That Drywall Workers Are “Employees” Under ABC Test
On August 2, 2022, the New Jersey Supreme Court unanimously reversed a finding that workers for a drywall installation company were independent contractors, instead ruling that the workers had been misclassified and were, in fact, employees. As previously outlined here, in 2018, the Supreme Court of California established the so-called "ABC ...
Florida Governor Proposes Anti-ESG Law
On July 28, Florida Governor Ron DeSantis proposed legislation that would ban state pension funds from selecting investments based on environmental, social and governance factors, typically considered "ESG investing." The proposed legislation would amend Florida's state statute on deceptive and unfair trade practices to prohibit practices ...
Chipotle Settles Fair Workweek Suit for $20 Million
On August 10, 2022, Chipotle Mexican Grill, Inc. ("Chipotle") and New York City reached a $20 million settlement to resolve a suit filed by the city in April 2021 alleging the restaurant committed approximately 599,693 violations of the Fair Workweek Law ("FWL") and failed to provide its employees the requisite 56 hours of paid sick leave ...
Ninth Circuit Panel Holds Investors Should Know Better Than to Rely on “Vague” Statements of Optimism
A Ninth Circuit appellate panel has affirmed a lower court decision dismissing a securities fraud class action brought under Rule 10b-5 against Align Technology, Inc. ("Align Tech" or the "Company"). Align Tech is a medical device manufacturer best known for its "Invisalign" braces. Between 2013 and 2018, the Company experienced an explosive ...
U.S. Treasury Department Blacklists Cryptocurrency Platform Tornado Cash Over Money Laundering Allegations
On August 8, 2022, the U.S. Department of the Treasury prohibited Americans from using Tornado Cash, a cryptocurrency platform, alleging that the service has helped criminals launder over $7 billion worth of cryptocurrencies and calling it a "threat to U.S. national security." Although "[t]he ability to operate anonymously is a central tenet ...
SEC COMPLAINT ALLEGING INSIDER TRADING FILED AGAINST COINBASE: ARE CRYPTO ASSETS “SECURITIES”?
On July 21, 2022, the Securities and Exchange Commission ("SEC") announced insider trading charges in connection with an action it filed against Ishan Wahi, a former Coinbase manager, Nikhil Wahi, and Sameer Ramani, in the U.S. District Court, Western District of Washington, Seattle Division, "for perpetrating a scheme to trade ahead of multiple ...
COVID Response Prompts Proposed Changes to Civil Procedure
During the height of pandemic chaos, federal district courts were left to their own devices to manage docket disruption. This resulted in hundreds of orders across the federal courts, ranging from a handful in one district, to dozens in another. Perhaps hoping to address the ad hoc nature of the judicial branch's pandemic response, Congress ...
Google Agrees to a Proposed $22 Million Settlement in Gender and Race Discrimination Suit
Title VII prohibits employment discrimination based on race, color, religion, sex, and national origin. To establish a prima facie case of discrimination, an employee must show that: (1) he/she is a member of a protected class, (2) met the employer's legitimate job expectations, (3) suffered an adverse employment action, and (4) another similarly ...
UBS AGREES TO $25 MILLION SETTLEMENT WITH THE SEC
On June 29, 2022, the Securities and Exchange Commission and UBS Financial Services agreed to a $25 million settlement to resolve claims that the company sold $2 billion of a complex investment strategy to customers without adequately explaining the risks of the strategy to both advisers and clients. The settlement stems from allegations that ...
5th Circ. Will Rehear In-House Courts Challenge, At The Request of the SEC
On May 18, 2022, in Jarkesy et al. v. U.S. Securities and Exchange Commission, case number 20-61007, a divided panel ruled that the U.S. Securities and Exchange Commission's system of in-house courts was unconstitutional. Since that decision was issued, the SEC and Biden administration have pushed for a rehearing. Attorneys for the government ...
Comments to SEC’s Proposed Rules on Cybersecurity Raise Concerns About Potentially Serious Consequences
On March 9, 2022, the Securities and Exchange Commission ("SEC") issued its Proposed Rules on Cybersecurity Risk Management, Strategy, Governance and Incident Disclosure. As per the SEC press release from March 9th, "[t]he proposed amendments are intended to better inform investors about a registrant's risk management, strategy, and governance ...
Ernst & Young To Pay $100 Million Penalty To Settle Cheating Scandal Charges—The Largest Ever Imposed By The SEC Against An Audit Firm
The U.S. Securities and Exchange Commission ("SEC") announced on June 28, 2022 that it charged accounting firm Ernst & Young LLP ("E&Y") for cheating on ethics tests and withholding evidence from the SEC's Enforcement Division. According to the SEC, E&Y admitted that a significant number of its auditors cheated on the ethics components of ...