Analysis

5th Circ. Private Funds Ruling Could Rewrite SEC Agenda

By Jessica Corso

The Fifth Circuit on Wednesday vacated U.S. Securities and Exchange Commission regulations that would have required private fund advisers to provide detailed disclosures to investors, in a sweeping decision that could upend the regulator's approach to promised rules on climate, artificial intelligence and crypto assets.

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Texas To Launch Stock Exchange Backed By $120M Capital

By Tom Zanki

TXSE Group Inc. said Wednesday it plans to launch the Texas Stock Exchange, a national trading venue for public companies and exchange-traded products, following a $120 million private capital raise that was guided by Haynes and Boone LLP.

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Ex-Skadden Atty, Credit Suisse Beat TransPerfect's Fraud Suit

By Rose Krebs

A Delaware federal judge has tossed TransPerfect Holdings LLC's lawsuit alleging that misrepresentations by a now-retired Skadden Arps Slate Meagher & Flom LLP partner and Credit Suisse Securities (USA) LLC led it to pay too much for language translation company TransPerfect Global Inc., finding that claims are time-barred.

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Billionaire's 'Naive' Stock-Trading Pilot Asks For No Prison

By Elliot Weld

A private pilot for U.K. billionaire Joe Lewis is asking for no prison time after pleading guilty to insider trading on stock tips provided by his boss, arguing that he has otherwise lived a law-abiding life and is less culpable than many white-collar defendants who've come through the Manhattan federal court.

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Dems Urge SEC To Double Down On Climate Enforcement

By Sarah Jarvis

A group of 38 Democratic lawmakers is urging U.S. Securities and Exchange Commission Chair Gary Gensler to step up enforcement of the agency's existing climate disclosure-related guidance, as the agency faces court challenges to its controversial climate rule.

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Tokenizing Real Assets Touches Crypto Concerns, Reps Say

By Aislinn Keely

Putting stocks and other real-world assets on the blockchain is markedly different from issuing cryptocurrencies, but federal lawmakers on Wednesday showed that the debate about how to regulate so-called tokenization is decidedly similar when it comes to weighing its potential efficiencies against threats to privacy and consumer protection.

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SEC Risk Alert Outlines Broker-Dealer Exam Process

By Sarah Jarvis

The U.S. Securities and Exchange Commission's Division of Examinations issued a risk alert Wednesday outlining its process for selecting broker-dealer firms to examine, refining the scope of the exam and the types of documents the division may request.

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Adviser Can't Unfreeze Assets To Pay Atty Fees

By Sydney Price

A Connecticut federal judge is standing by his earlier decision refusing to release $50,000 in frozen assets to pay the attorneys of an investment adviser and his wife, who face a $5.9 million fraud suit from the U.S. Securities and Exchange Commission.

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Archegos Ex-Exec Who Sued Fund Testifies At Founder's Trial

By Pete Brush

An investment pro who claims in a $50 million suit that he was pressured to defer his Archegos pay testified Wednesday in the $36 billion market manipulation case against fund founder Bill Hwang that Hwang called the shots and was rarely questioned.

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Truth Social Investors Want Fla. Suit Paused For Del. Claims

By Carolina Bolado

Two early investors in Donald Trump's Truth Social media company urged a Florida judge on Wednesday to pause the company's suit trying to claim their shares while a first-filed suit in Delaware is pending, arguing that the company is forum shopping in an attempt to get around an unfavorable Delaware Chancery Court order.

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Del. Justices Uphold Chancery's Toss Of Auto Parts Deal Suit

By Jeff Montgomery

Delaware's Supreme Court has refused to reverse the Court of Chancery's 2023 dismissal of a stockholder suit accusing Chicago-based factory and automotive parts venture Distribution Solutions Group Inc. of failing to disclose conflicts surrounding and costs of a three-way merger in late 2021.

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StarTek Controller Sued In Del. After Public-Share Buyout

By Jeff Montgomery

Two public stockholders of global customer experience outsourcing consultant StarTek Inc. sued four company directors and its private equity controller in Delaware's Court of Chancery on Wednesday, alleging an unfair and conflicted $4.30-per-share buyout of the company's remaining public shares.

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Nigeria Holding US Binance Exec Hostage, Lawmakers Say

By Kevin Pinner

The White House's hostage negotiator should begin seeking the release of a top executive at cryptocurrency exchange Binance whom the Nigerian government is holding personally liable for tax evasion charges against the company, the House Foreign Affairs Committee's chairman has said.

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Axos Says Money Market Account Suit Should Be Arbitrated

By Katryna Perera

Axos Bank has urged a California federal judge to either toss or force into arbitration a proposed class action alleging it reclassified customers' high-yield money market accounts into lower-yield investment accounts without informing them, saying federal law allows banks to offer accounts with variable rates that the bank can change at its discretion.

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Hertz Hit With Shareholder Suit Over Costs Tied To EVs

By Emilie Ruscoe

Car rental giant Hertz Global Holdings Inc. and two Hertz executives are facing a proposed investor class action in Florida federal court alleging the company hurt investors by overhyping demand for electric cars only later to announce a nearly $200 million hit to earnings as it worked to offload electric vehicles.

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Wells Fargo Sued For Allegedly Aiding $300M Ponzi Scheme

By Katryna Perera

Wells Fargo Bank NA has been hit with a proposed class action in Florida federal court alleging that it aided and abetted a $300 million Ponzi scheme that duped more than 1,000 investors, most of whom were elderly and lost substantial life savings due to the scheme.

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Bank Shareholders Say Venezuelan Takeover Cost Them $27M

By Carolina Bolado

Shareholders in a small Miami bank told jurors Wednesday that board members working for the Venezuelan government had taken control of the bank and cost shareholders $27 million by engaging with the sanctioned Venezuelan government.

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Dorsey & Whitney Adds White Collar Duo In Phoenix, DC

By Adrian Cruz

Dorsey & Whitney LLP announced the hire of two experienced white collar attorneys in Phoenix and Washington, D.C., including the former financial crimes and public corruption chief at the U.S. Attorney's Office for the District of Arizona.

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Parsing Controversial Del. General Corporation Law Proposals

In response to issues raised in three recent high-profile Delaware Court of Chancery decisions, many amendments to the Delaware General Corporation Law were quickly proposed that, if enacted, would bring significant changes likely to be hotly debated — and litigated — for the foreseeable future, say attorneys at Morgan Lewis.

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5th Circ. Venue-Transfer Cases Highlight Mandamus Limits

Three ongoing cases filed within the Fifth Circuit highlight an odd procedural wrinkle that may let district courts defy an appellate writ: orders granting transfer to out-of-circuit districts, but parties opposing intercircuit transfer can work around this hurdle to effective appellate review, says Charles Fowler at McKool Smith.

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A Healthier Legal Industry Starts With Emotional Intelligence

The legal profession has long been plagued by high rates of mental health issues, in part due to attorneys’ early training and broader societal stereotypes — but developing one’s emotional intelligence is one way to foster positive change, collectively and individually, says attorney Esperanza Franco.

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Judge Who Took Israel Trip Recuses Self From Gaza Case

By Jake Maher

A Ninth Circuit judge on Thursday recused himself from a case over the Biden administration's support for Israel's military efforts in Gaza, suggesting he disagreed with Palestinian rights activists' claim that a sponsored trip to Israel disqualified him but nevertheless would step aside "out of an abundance of caution."

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Analysis

'Brussels Effect' Of EU's AI Act Is Uncertain, Legal Pros Say

By Dorothy Atkins

BigLaw attorneys advising international clients on the European Union's AI Act tell Law360 there are significant uncertainties over vague terms in the 458-page statute, how its steep eight-figure fines will be enforced, and whether it will set a new standard globally as part of the "Brussels effect."

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NY Prosecutor Says DOJ Self-Disclosure Policies Are Working

By Sarah Jarvis

The proliferation of policies across the U.S. Department of Justice crediting firms and individuals for voluntarily self-disclosing misconduct indicates the approach is effective, even though instances of such disclosures aren't overwhelming, a senior federal prosecutor in New York told a gathering of compliance officers on Thursday.

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'Any Judge' Should Have DQ'd In Romance Case, Attys Told

By Catherine Marfin

A Texas federal judge was adamant Thursday that a former bankruptcy judge should have recused himself from an engineering company's Chapter 11 proceeding because of his relationship with a then-Jackson Walker LLP partner, but seemed torn over whether a lawsuit from a former shareholder over the secret relationship had a leg to stand on.

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3rd Circ. Nominee Reports Over $9M Net Worth

By Courtney Bublé

Adeel Mangi, whose nomination for the Third Circuit has stalled in the Senate, reported a net worth of over $9 million in financial forms filled out last fall.

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Former New Jersey AG Recalls 'Gross' Meeting With Menendez

By Carla Baranauckas

A U.S. Securities & Exchange Commission official took the stand in the bribery trial of Sen. Robert Menendez on Thursday, testifying that he shut down "gross" inquiries by the congressman while the official was serving as New Jersey's attorney general.

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Hallie Biden Tells Jury She 'Panicked' Finding Hunter's Gun

By Leslie A. Pappas

Hunter Biden's former sister-in-law and ex-girlfriend told a Delaware federal jury Thursday that she "panicked" when she found a gun and a box of bullets in his truck and threw the gun in a grocery store trash can because she was afraid he might hurt himself.

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In 13-Year Trademark Fight, Chicago Judge Says No More

By Andrew Karpan

A Chicago federal judge brought to a close a trademark fight between two vaping companies surrounding the phrase "21st Century Smoking" that has stretched on for over a decade and led to millions of dollars in sanctions over thousands of deleted emails and long-hidden documents.

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Ex-CFO Says McElroy Deutsch's $7M Relief Bid Is A Reach

By Andrea Keckley

McElroy Deutsch Mulvaney & Carpenter LLP's former chief financial officer said Thursday that his old firm's motion for partial summary judgment in a theft suit against him "seeks relief that far exceeds the scope" of his recent criminal guilty plea, defending his request that the New Jersey state court hold off ruling on the bid.

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