Crypto firm Terraform Labs has agreed to a $4.47 billion settlement with the U.S. Securities and Exchange Commission after a Manhattan jury found the firm and its founder Do Kwon liable for fraud in April.
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THURSDAY, JUNE 13, 2024 Law360 iOS App Law360 Android App Follow Law360 on Facebook Follow Law360 on LinkedIn Follow Law360 on Twitter

TOP NEWS

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Terraform To Settle With SEC For $4.5B After Fraud Trial

By Aislinn Keely

Crypto firm Terraform Labs has agreed to a $4.47 billion settlement with the U.S. Securities and Exchange Commission after a Manhattan jury found the firm and its founder Do Kwon liable for fraud in April.

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SPAC Dealmakers Expect Modest Pickup After Market Bottom

By Tom Zanki

Market professionals expect a slow pickup in deals involving special-purpose acquisition companies starting in the second half of 2024, predicting on Wednesday that a leaner market will emerge following the recent crash and imposition of tighter regulations.

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CalPERS Opposes $5B Atty Fee In Musk Pay Fight

By Jeff Montgomery

The nation's largest public pension fund lined up Wednesday against a proposed $5 billion-plus fee for stockholder attorneys whose Delaware Court of Chancery suit blocked Tesla CEO Elon Musk's one-time $56 billion compensation plan, one day ahead of a Tesla shareholder vote to resurrect the pay deal.

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Okta, Investors Reach $60M Deal In Cyberattack Coverup Suit

By Katryna Perera

Okta Inc. investors have asked a California federal judge to give the first OK to a $60 million settlement reached in a suit alleging the software company misled the certified class about a 2022 cyberattack.

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QuantumScape Shareholders Seek Initial OK For $47.5M Deal

By Katryna Perera

Investors of QuantumScape have asked a California federal judge to give the first green light to a $47.5 million settlement to end their class action suit, which alleged published articles revealed the company made false statements about the quality of its batteries and the tests it used to measure performance.

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POLICY & REGULATION

GOP, Dems Fight Over Climate Investment 'Collusion'

By Bryan Koenig

House Judiciary Democrats and Republicans traded barbs and competing staff reports Wednesday over investment industry initiatives to combat climate change that the GOP called a "climate cartel" and their partisan rivals said is simply responsible, and voluntary, investing.

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FDIC Head Must Go To Change Status Quo, GOP Reps. Say

By Sarah Jarvis

House Republicans on Wednesday criticized Federal Deposit Insurance Corp. Chair Martin Gruenberg for not immediately resigning in the wake of a probe of the agency's workplace culture, but some Democrats took issue with the scope of a report on the investigation's findings while applauding his rumored successor.

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CIVIL ENFORCEMENT

Loan Co. Owners Say SEC Improperly Expanded Receivership

By Carolina Bolado

A couple accused of scamming 1,200 investors out of nearly half a billion dollars asked the Eleventh Circuit on Wednesday to reverse an order expanding a receivership of their merchant loan business, arguing their due process rights were violated when their personal assets were added to the receivership.

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WHITE COLLAR

Hedge Fund Manager Cops To $3M Fraud Scheme

By Katryna Perera

A New York fund manager on Wednesday admitted to defrauding investors out of at least $3 million through his investment management firm, in a scheme that has been ongoing for the last three years.

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'Tiger-Wolf' Trader Cops To Wire Fraud For $700K Scheme

By Emilie Ruscoe

A 26-year-old Charlotte man on Wednesday pled guilty to federal prosecutors' claims that he defrauded over 100 would-be investors in his purported hedge fund, Tiger-Wolf Capital LLC, spending much of their money on his own lavish lifestyle.

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Lies At Heart Of Fraud Case Over COVID Test Kits, Jurors Told

By Carla Baranauckas

The retrial of a securities fraud case over a COVID test kit deal that never materialized will center on lies, according to opening statements delivered in New Jersey federal court Wednesday.

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DELAWARE

Forte Biosciences Reaches $2M Deal To End Chancery Suit

By Jeff Montgomery

Clinical-stage biopharmaceutical company Forte Biosciences has reached a multipart, $2 million concession-plus-cash settlement in Delaware's Court of Chancery with a private investment fund that ran a board proxy contest after its calls to liquidate the business were met with poison pill pushback.

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Directors Of Defunct Med Tech SPAC Seek Toss Of Del. Suit

By Leslie A. Pappas

Directors of a special purpose acquisition company that merged with now-defunct medical technology company Better Therapeutics Inc. urged Delaware's Court of Chancery on Wednesday to toss a shareholder's suit about the $15 million de-SPAC merger, saying it wasn't like other problematic SPAC deals.

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Brief

Shareholders To Settle Discovery-AT&T Merger Suit In Del.

By Leslie A. Pappas

Former shareholders of Discovery Inc. who sued in Delaware's Court of Chancery over the media entertainment company's $43 billion merger with AT&T in 2022 have agreed to settle their class action and intend to finalize settlement documentation by July 5, the parties told the court late on Tuesday.

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CRYPTO & FINTECH

SEC Says Texas Crypto Cases Aren't Related To Fraud Suit

By Spencer Brewer

The U.S. Securities and Exchange Commission asked a Texas federal judge not to stay its case accusing a crypto asset mining and hosting company of securities fraud, saying in a Wednesday brief that the judge's concerns about other pending cases creating "moving-target precedents" were unfounded.

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INVESTOR ACTIONS

2nd Circ. Backs Brokerage In Suit Over Biotech's Failed IPO

By Yun Park

The Second Circuit on Wednesday declined to reinstate a Texas company's suit against an investment brokerage that advised biotech Inpellis on an initial public offering that failed and sent the company to file Chapter 7, ruling a lower court rightly found a global settlement eclipsed the need for a jury trial.

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Cabot Execs Misled Investors On Fracking Impact, Suit Says

By Sydney Price

Insiders of Cabot Oil & Gas Corp., now known as Coterra Energy Inc., were hit with a shareholder derivative suit alleging they did not disclose that Cabot was not safeguarding drinking water from the company's fracking operations, which eventually led to criminal charges and reputational and financial damages.

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Lumen Board Faces Investor Suit Over Lead Cable Liability

By Emilie Ruscoe

The board members of Louisiana-headquartered telecommunications company Lumen Technologies Inc. face a shareholder derivative suit alleging they breached their fiduciary duties following revelations about, and subsequent scrutiny of, lead components of the company's physical cable networks.

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DEALS LITIGATION

Brief

Oppenheimer, Cybersecurity Co. Settle $12M SPAC Bill Spat

By Katryna Perera

Oppenheimer & Co. and an Israeli cybersecurity company have reached a settlement to end claims that the company refused to pay $12 million in fees for SPAC merger-related services the investment bank provided, according to a New York federal court filing made Wednesday.

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TRANSACTIONS

GameStop Raises More Than $2.1B In Share Sale

By Jade Martinez-Pogue

GameStop Corp. has raised over $2.1 billion as part of a share sale, with plans to use the proceeds for general corporate purposes such as future acquisitions or investments.

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INSURANCE

Judge Won't Trim $18M Shareholder Settlement Coverage Suit

By Jennifer Mandato

A Pennsylvania federal judge declined to toss certain bad faith allegations against an insurer accused of wrongfully denying coverage for an $18 million settlement between an asset management company and a group of shareholders, adopting a magistrate judge's recommendation that the company sufficiently alleged its claim of bad faith.

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PEOPLE

Labaton Keller Sucharow Adds Securities Litigator In NY

By Christine DeRosa

Lauren Ormsbee did not grow up dreaming of fighting securities fraud, but that's the very role she's spent her career in, including in her new position as a partner and litigation team leader at Labaton Keller Sucharow LLP.

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Rimon Hires 5 Partners, Expands Global Transactions Team

By Jack Rodgers

A team of five partners focusing on transactional, finance and corporate matters has joined Rimon PC across several countries to represent investors, asset managers, credit funds and other clients.

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Ex-Supreme Court Clerk, Federal Atty Joins McGuireWoods

By Andrea Keckley

McGuireWoods LLP announced the addition of another former federal prosecutor to its ranks on Wednesday, this time a product liability expert from Perkins Coie LLP who advises companies on various disputes and government investigations.

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Brief

Freshfields Adds Ex-Kirkland, Davis Polk Attys In New York

By Anna Sanders

Freshfields Bruckhaus Deringer LLP bolstered its corporate offerings in New York this week with M&A partner Joshua Ayal and capital markets partner Jacqueline Marino.

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EXPERT ANALYSIS

How SEC Could Tackle AI Regulations On Brokers, Advisers

The U.S. Securities and Exchange Commission held an open meeting of its Investor Advisory Committee on June 6 to review the use of artificial intelligence in investment decision making, showing that regulators are being careful not to stifle innovation or implement rules that will quickly be made irrelevant after their passage, says Brian Korn at Manatt Phelps.

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Beware Shifting Provisions In Middle-Market Loan Documents

In recent years, many credit facility provisions previously considered to be market standard have been negotiated, often turning in favor of borrowers, demanding renewed diligence from workout officers and restructuring counsel operating in the middle market, say attorneys at Crowell & Moring.

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Litigation Inspiration: Attys Can Be Heroic Like Olympians

Although litigation won’t earn anyone an Olympic medal in Paris this summer, it can be worthy of the same lasting honor if attorneys exercise focused restraint — seeking both their clients’ interests and those of the court — instead of merely pursuing every advantage short of sanctionable conduct, says Bennett Rawicki at Hilgers Graben.

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LEGAL INDUSTRY

Analysis

How 3 Firms Cleared 2 Ex-Autonomy Execs In HP Fraud Case

By Bonnie Eslinger

A California federal jury's rejection last week of fraud charges against the founder and former finance vice president of British software company Autonomy validated an approach by the defendants' three law firms — Steptoe, Clifford Chance and Bird Marella — to form a "seamless" collaboration throughout the trial, from jury selection to closing arguments.

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Senate Panel OKs Fix For Federal Courts' 'Genuine Crisis'

By Courtney Bublé

The Senate Judiciary Committee voted out unanimously on Thursday a bipartisan bill to create 66 new and temporary judgeships to alleviate the federal courts' workload.

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Confronting The Psychological Toll Of Personal Injury Law

Personal injury lawyers advocate for clients who have experienced trauma, loss and life-altering injuries, but these cases can have an emotional impact on attorneys themselves — so it is crucial to address these challenges proactively and openly, and normalize the conversation around mental health in the legal profession, says Lisa Lanier at Lanier Law Group.

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Series

Playing Chess Makes Me A Better Lawyer

There are many ways that chess skills translate directly into lawyer skills, but for me, the bigger career lessons go beyond the direct parallels — playing chess has shown me the value of seeing gradual improvement in and focusing deep concentration on a nonwork endeavor, says attorney Steven Fink.

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LAW FIRMS IN TODAY'S NEWS

Adamski Moroski

Akin Gump

Andrews & Springer

Ashby & Geddes

Bernstein Litowitz

Bingham McCutchen

Bird Marella

Brown Law Firm

Cadwalader Wickersham

Cleary Gottlieb

Clifford Chance

Cooch & Taylor

Cravath Swaine

Crowell & Moring

DLA Piper

Dailey LLP

Davis Polk

Dentons

Ellenoff Grossman

Elliott Sauter

Freshfields

Friedman Oster

Gibson Dunn

Green LLP

GreenClark PLLC

Hangley Aronchick

Hilgers Graben

Holcomb & Ward

Kaplan Hecker

Kaplan Zeena

Katie Lasky Law

Kennedys Law LLP

Kessler Topaz

Kirkland & Ellis

Kopelowitz Ostrow

Labaton Keller

Lanier Law Group

Law Office of Steven J. Fink PLLC

Levi & Korsinsky

Loeb & Loeb

Lowey Dannenberg

Manatt Phelps

McGuireWoods

Meluney Alleman

Morgan Lewis

Morris Kandinov

Morris Nichols

Newman Ferrara

Norton Rose

Paul Weiss

Perkins Coie

Quinn Emanuel

Reed Smith

Richards Layton

Rimon PC

Rosen Law Firm PA

Ross Aronstam

Schlam Stone

Steptoe LLP

Stumphauzer Kolaya

Sullivan & Cromwell

Wilson Sonsini

COMPANIES IN TODAY'S NEWS

AMC Entertainment Holdings Inc.

Airbnb Inc.

Alexander Capital LP

Allergan PLC

CNA Financial Corp.

Citigroup Inc.

Coterra Energy Inc.

Deloitte Touche Tohmatsu Ltd.

Dominion Energy Inc.

Federated Hermes Inc.

GameStop Corp.

JPMorgan Chase & Co.

Jefferies Financial Group Inc.

Johnson Rice & Co. LLC

LinkedIn Corp.

Lumen Technologies Inc.

Mountain Crest Acquisition Corp.

NASDAQ Inc.

New York University

Okta Inc.

Oppenheimer Holdings Inc.

Pacific Investment Management Co. LLC

Par Funding

Perceptive Advisors LLC

Pew Research Center

Playboy Enterprises Inc.

Reddit Inc.

Robinhood Markets Inc.

SCANA Corp.

State Street Global Advisors Inc.

Tesla Inc.

The Boeing Co.

The Goldman Sachs Group Inc.

Therapeutics Inc.

Total Quality Logistics Inc.

Warner Bros. Discovery Inc.

Warner Bros. Entertainment Inc.

GOVERNMENT AGENCIES IN TODAY'S NEWS

California Public Employees' Retirement System

Commodity Futures Trading Commission

Delaware Court of Chancery

Federal Bureau of Investigation

Federal Deposit Insurance Corp.

Judicial Conference of the United States

North Carolina Department of State Treasurer

Occupational Safety and Health Administration

Pennsylvania Department of Environmental Protection

U.S. Attorney's Office

U.S. Attorney's Office for the District of New Jersey

U.S. Attorney's Office for the Eastern District of New York

U.S. Attorney's Office for the Northern District of California

U.S. Attorney's Office for the Western District of North Carolina

U.S. Bankruptcy Court for the District of Massachusetts

U.S. Court of Appeals for the Eleventh Circuit

U.S. Court of Appeals for the Ninth Circuit

U.S. Court of Appeals for the Second Circuit

U.S. Department of Justice

U.S. District Court for the District of New Jersey

U.S. District Court for the Eastern District of New York

U.S. District Court for the Northern District of California

U.S. District Court for the Northern District of Illinois

U.S. District Court for the Northern District of Texas

U.S. District Court for the Southern District of New York

U.S. District Court for the Western District of Louisiana

U.S. District Court for the Western District of Pennsylvania

U.S. Government Accountability Office

U.S. Navy

U.S. Securities and Exchange Commission

U.S. Supreme Court

United States District Court for the Southern District of Ohio