This Week In Securities Litigation (Week of May 19, 2025)
The Commission filed one new administrative action last week. Other regulators published market advice on select topics to assist the markets and investors while streamlining key topics involved in in securities transactions.
Be careful, be safe this week.
Commission
Remarks, Chair Atkins: In remarks delivered at the Crypto Task Force Roundtable on May 12, 2025 (here) SEC Chair Paul Atkins may have launched a new day for crypto and the Commission (here). Chair Atkins appears to be focused on what he calls a goal “to be the ‘crypto capital of the planet” as envisioned by President Trump” (Here) This apparently begins by returning to the traditional approach of developing what the Chair called “a rational regulatory framework for crypto asset markets that establishes clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors. . .” This approach contrasts sharply with, prior practice and will, according to the Chair, eliminate the ad hoc enforcement action approach previously used. The dawning of a new day in the crypto area centers on three points, according to Mr. Atkins: Issuance of regulations; custody of the assets; and giving registrants broader authority.
SEC Enforcement – Filed and Settled Actions
Statistics: Last week the Commission filed 1 settled administrative proceeding.
Improper accounting practices: In the Matter of Synchronoss Technologies, Inc., Adm. Proc. File No. 3-20883 (May 13, 2025) is an action that involved the company and 5 of its executives and employees — Clayton Thomas, Mare Bandini, Daniel Ives, John Murdock, and Ronald Prague, Esq. The company is a New Jersey based technology firm that primarily provides products, software, and services to telecommunications firms. In July 2018 the firm announced a restatement of its financial statements for the fiscal years ended 2014 and 2013. It involved about $190 million in revenue. The revenue had been recognized in violation of GAAP. It can be classified into three groups: 1) situations where there was not persuasive evidence of a transaction; 2) matters where the firm recognized revenue on licensing agreements rather than combining it ratably over the term of the agreement; and 3) situations where the revenue was recognized upfront rather than ratably over the term of the transaction. The transactions involved misconduct by executives and employees. It resulted from a material weakness in controls. The company was ordered to pay $12,5000,000; Thomas, $90,000; Bandini, $75,000; Ives $15,000; Murdock, $15,000; and Prague, $25,000. The funds will be placed into a fair fund.
ESMA
Guidelines: The European Securities and Markets Authority delivered technical advice on market abuse and SME growth as part of the listing act on May 7, 2025 (here).
Guidelines: The ESMA issued supervisory guidelines to prevent market abuse under MiCA, on April 29, 2025 (here).
Singapore
Prospectus requirements: The Monetary Authority of Singapore has proposed to streamline prospectus requirements and broaden investor outreach channels for IPOs, according to a release dated May 15, 2025 (here).
Remarks: Chia Der Juin, Managing Director, Monetary Authority of Singapore, delivered at the FAST Conference 2025, May 7, 2025 (here).