News & Analysis as of

Securities and Exchange Commission (SEC) Misrepresentation Securities Regulation

Freiberger Haber LLP

Enforcement News: Affinity Fraud and Ponzi Schemes in the News Again

Freiberger Haber LLP on

Ponzi schemes and affinity fraud frequently overlap because both exploit trust and social interactions to operate effectively. A Ponzi scheme relies on a continuous stream of new investors to pay returns to earlier...more

Jones Day

SEC's and Private Litigants' Continued Focus on "AI Washing"

Jones Day on

On September 4, 2024, U.S. Securities and Exchange Commission ("SEC") Chair Gary Gensler reiterated concerns about artificial intelligence-related ("AI") disclosures and the need for companies to communicate accurately about...more

Vinson & Elkins LLP

Failure to Act: SEC Brings Individual Charges Against CFO and Audit Committee Chair in Corporate AI Fraud Case

Vinson & Elkins LLP on

On September 16, 2024, the United States Securities and Exchange Commission (“SEC” or the “Commission”) brought charges against Kubient, Inc.’s (“Kubient”) former chairman and chief executive officer (“CEO”) for allegedly...more

White & Case LLP

New Settlements Demonstrate the SEC’s Ongoing Efforts to Hold Companies Accountable for AI-Washing

White & Case LLP on

In the past few months, we have published several alerts concerning the increase in regulatory attention to "AI washing," or making unfounded claims regarding artificial intelligence ("AI") capabilities.1 Senior officials at...more

BCLP

The Supreme Court Considers Item 303 Violations as Basis for Securities Fraud Claims

BCLP on

Corporate executives know they must disclose in their companies’ financial statements trends or uncertainties affecting their business. Such disclosure is a requirement of Item 303 of SEC Regulation S-K....more

Proskauer - Corporate Defense and Disputes

Supreme Court Requires Traceability for Securities Act Claims Arising from Direct Listings

The U.S. Supreme Court held that purchasers of shares sold to the public through a direct listing cannot sue under Section 11 of the Securities Act of 1933 unless they can trace their shares to an allegedly defective...more

Bilzin Sumberg

SEC's Proposed Rule Changes Seek to Curb Greenwashing

Bilzin Sumberg on

We have previously written about the Securities and Exchange Commission (“SEC”) considering additional regulations on statements and disclosures made by public companies and investment funds relating to their credentials on...more

A&O Shearman

Company Acquired By SPAC Agrees To Pay $125 Million To Settle SEC Probe Months After CEO Was Charged With Fraud

A&O Shearman on

On December 21, 2021, the Securities and Exchange Commission (SEC) announced that Nikola Corporation—a publicly traded company that develops, manufactures, and sells electric trucks—had agreed to a $125 million settlement...more

Cadwalader, Wickersham & Taft LLP

Securities Litigation Update: Divided Ninth Circuit Permits Direct-Listing Investors to Assert Securities Act Claims, Despite...

On September 20, 2021, in Pirani v. Slack Technologies, Inc., a divided panel of the U.S. Court of Appeals for the Ninth Circuit held that investors who purchase stock in a “direct listing”—in which pre-existing shares are...more

Akerman LLP

SPAC Mergers in the SEC’s Crosshairs? Recent Enforcement Activity Highlights Increased SPAC Merger Risk

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The past few weeks have seen a turn of events for companies involved with Special Purpose Acquisition Company (SPAC) vehicles. First, the Securities and Exchange Commission (SEC) announced civil administrative charges against...more

Jones Day

SPAC Founders, Beware: SEC Targets Founders Shares

Jones Day on

The Securities and Exchange Commission ("SEC") charges a special purpose acquisition company ("SPAC"), its CEO, and sponsor, as well as the merger acquisition target, with securities law violations, resulting in significant...more

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