Yesterday, the SEC announced that Judge Margaret “Meg” Ryan has been named Director of the Division of Enforcement, effective September 2nd. Judge Ryan is a senior judge of the United States Court of Appeals for the Armed Forces and a lecturer on military law and justice at Harvard University Law School. Acting Director of Enforcement Sam Waldon will continue in his previous role as Chief Counsel for the Division.
It’s been over two years since we last discussed a fraud case the government described as its “first crypto insider trading case.” The case involved the employee of OpenSea, the largest online market for NFTs, who was responsible for selecting NFTs to be featured on OpenSea’s homepage, allegedly purchasing those NFTs in advance and selling shortly after they were featured, at a substantial gain. The defendant was convicted of wire fraud and money laundering charges — which the U.S. Attorney’s Office opted to bring rather than securities or commodities fraud charges — after a jury trial.
The Second Circuit has just vacated those convictions, finding that two jury instructions — “that property protected by the wire fraud statute need not have commercial value, and the defendant could be convicted of wire fraud by failing to abide by societal mores” — were prejudicial error that warranted a new trial. This Sheppard Mullin blog explains the Second Circuit’s issues with the jury instructions as follows:
The Court held that property must be shown to have commercial value to satisfy the federal wire fraud statute . . . OpenSea did not charge for its NFT feature information and evidence submitted by the government suggested that the information was merely tangential to OpenSea’s business. Since the jury could have ignored such evidence under the district court’s erroneous instruction, the Second Circuit held that Chastain was prejudiced by the instruction and entitled to a new trial.
The Court also considered if the instruction that the jury could convict if Chastain “conducted himself in a manner that departed from traditional notions of fundamental honesty and fair play in the general and business life of society” was prejudicial error. In concluding that it was, the court held that the legal standard was incorrect and allowed the jury to improperly convict based on the government’s “view of integrity” in business conduct rather than the misappropriation of “property rights only.” It added that under such a standard, “‘almost any deceptive act could be criminal.’”
The blog says that Chastain follows SCOTUS’s lead in Kelly v. United States, 590 U.S. 391 (2020) and Ciminelli v. United States, 598 U.S. 306, 314 (2023), imposing limitations on prosecutors’ use of the federal wire fraud statute, and has important implications for the crypto industry.
Some experts hypothesized that prosecutors would turn to the federal wire fraud statute to crack down on insider trading in the space since United States Department of Justice policy now directs prosecutors not to pursue securities or commodities fraud charges that would require litigating whether the digital asset is a security or a commodity and the Securities and Exchange Commission embarks on its ambitious “Project Crypto” to develop a new regulatory framework. Chastain serves as another check on prosecutorial creativity when using the federal wire fraud statute to police crypto.
The transcript for our recent “Securities Offerings During Blackout Periods” webcast is now available. Willkie Farr’s Eddie Best, O’Melveny’s Ryan Coombs, Perkins Coie’s Allison Handy and Jones Day’s Michael Solecki discussed all the things issuers considering tapping the capital markets during a “blackout period” have to think about. Topics addressed include:
– Challenges blackout periods present for capital raising
– Factors to consider in deciding whether to offer securities during a blackout period
– Issues surrounding use and content of “flash numbers” in a prospectus
– SEC staff and judicial views on flash numbers
– Perspective of underwriters & their counsel
– Differences between recently completed quarter and one in-process
– Due diligence and comfort letter issues
– Offering-specific issues
– Process of updating prospectus disclosure
Don’t forget that you may be able to earn CLE credit for watching this webcast replay as well!
If you’re not yet a member of TheCorporateCounsel.net, try a no-risk trial now. Our “100-Day Promise” guarantees that during the first 100 days as an activated member, you may cancel for any reason and receive a full refund. If you need assistance, send us an email at info@ccrcorp.com – or call us at 800.737.1271.
Last month, Liz blogged about the “crypto treasury / SPAC” play. She also shared that more than 70 public companies around the world currently hold over $67 billion worth of bitcoin. And earlier this month, John blogged about Figma’s “blockchain common stock.”
But what does corporate adoption of crypto look like generally? Deloitte asked about this in the second quarter 2025 North American CFO Signals survey, which polled 200 North American finance chiefs working at companies with at least $1 billion in revenues, and the results may surprise you.
37% of respondents said they have already had discussions with their boards about the use of cryptocurrencies in their organizations; 41% indicated they’d spoken to their CIOs about it; 34% said they’d discussed crypto with their banks or lenders; and only 2% said they have not had any conversations about cryptocurrency with key stakeholders.
Only 1% said they did not envision using cryptocurrency for business functions in the long term.
23% said their treasury departments will utilize crypto for either investments or payments within the next two years. That percentage is closer to 40% organizations with $10 billion in revenues and up.
15% believe their treasury departments will likely purchase non-stable cryptocurrencies as part of their investment strategies over the next 24 months. Respondents at organizations with revenues of $10 billion and up were even more likely to tick the box. 24% said their finance departments will likely invest in non-stable cryptocurrencies over the next two years.
15% say that, within two years, their organizations will likely accept stablecoin as payment. 24% for organizations with at least $10 billion in revenues.
52% indicated they anticipate using non-stable cryptocurrency for supply chain tracking. 48% said the same for stablecoin.
The article notes some potential advantages to these adoptions:
Non-stable cryptocurrencies can help diversify an organization’s investment portfolio.
Despite price fluctuations, non-stable crypto investments offer the possibility of substantial price appreciation—gains that can far outweigh returns on assets like Treasurys.
Stablecoins tied to the US dollar can—in some cases—serve as a hedge against changes in foreign exchange rates.
45% cited enhanced protection of customer privacy as the top reason to conduct transactions with stablecoin. Improved facilitation of cross-border transactions followed at 39%. Transactions conducted in crypto do not require intermediaries like banks, thus reducing costs and speeding up settlement.
Payment in crypto transactions can greatly reduce the need to reconcile payment information between buyer and seller that doesn’t match. Equally beneficial, crypto transactions are conducted and recorded quickly on the blockchain—a digital public ledger that serves as the foundation for cryptocurrency.
But CFOs also shared a few concerns:
When asked about their biggest worries related to investing in cryptocurrency, 43% of CFOs cited price volatility.
Complexities in accounting and controls (42%) were next on the list, followed by lack of industry regulation (40%).
When I read this Mayer Brown alert — focused on debt reopenings — that shares background info about CUSIPs, I was surprised that I’d either forgotten or never learned some of the basics. We all know the term. We know that CUSIPs are codes used in the US and Canada to identify securities. Here are some things that you may or may not know (or remember if it’s been a while since you’ve dealt directly with obtaining CUSIPs).
CUSIP stands for “Committee on Uniform Security Identification Procedures.”
A CUSIP consists of nine digits; the first six digits identify the issuer and are assigned to issuers in alphabetic sequence (also known as the base or CUSIP-6), and the next two characters (alphabetic or numeric) identify the issue. The ninth digit is a check digit to ensure the CUSIP’s accuracy.
CUSIP Global Services (CGS), which assigns CUSIPs, is managed on behalf of the American Bankers Association by S&P Global Market Intelligence, a division of S&P Global.
Certain corporate actions — like a debt reopening or an A-B exchange offer — require a temporary or contra CUSIP used to identify and segregate tendered from un-tendered securities.
Obviously, offering a new class of securities requires a new CUSIP number. But other corporate actions — like a stock split or name change — may require a new CUSIP. My understanding is that they can be obtained relatively quickly, but that DTC’s approval process to declare a CUSIP as “eligible” on its system may not be. Plus, certain advance notice requirements may require the new CUSIP, so advance planning is key.
Are there other terms, tools, industry players we use or reference all the time but may have forgotten these sorts of details about? Terms associates hear thrown around but may not fully appreciate? Perhaps a series of “getting to know X” blogs are in order. If you have any suggestions, please reach out at mervine@ccrcorp.com.
Here’s something I shared yesterday on DealLawyers.com:
The second set of 2025 DGCL amendments, reflected in Senate Bill 95, which was signed by the governor on June 30 and mostly became effective on August 1, has been understandably overshadowed by their slightly older sibling. But there are a few important things to know. Kyle Pinder of Morris Nichols recently penned a client alert that pulls all the 2025 amendments together in one helpful summary.
The second round of amendments primarily did the following: (i) clarified the types of claims that may be covered by certificate of incorporation- or bylaw-based forum selection provisions, and (ii) extended the prohibition on certificate of incorporation- or bylaw-based fee-shifting provisions to cover this clarified universe of claims.
On forum selection clauses, the amendments dealt with a tricky situation resulting from a circuit split.
Amended Section 115 adopts the result reached by the Seventh Circuit and permits forum selection provisions addressing non-internal corporate claims that “relate to the business of the corporation, the conduct of its affairs, or the rights or powers of the corporation or its stockholders, directors or officers,” so long as they permit stockholders to bring such claims in at least one court in Delaware (e.g., to bring Exchange Act derivative claims in the District of Delaware).
With respect to fee shifting, the DGCL already prohibited org doc provisions from shifting liability for fees and expenses incurred in connection with internal corporate claims to a stockholder. Amended DGCL Sections 102(f) and 109(b) extend that moratorium to prohibit provisions shifting to a stockholder the corporation’s fees and expenses incurred in connection with “any other claim that a stockholder, acting in its capacity as a stockholder or in the right of the corporation, has brought . . . .”
The amendments tackle a handful of miscellaneous items, too, that are neatly addressed on the last page of the alert.
I’m happy to say that Kyle will be speaking on this topic during the “Delaware Hot Topics: Navigating Case Law & Statutory Developments” panel with fellow panelists Hunton’s Steve Haas, Barnes & Thornburg’s Jay Knight and Faegre Drinker’s Oderah Nwaeze at our Fall “Proxy Disclosure & Executive Compensation” Conferences happening in Las Vegas and virtually on October 21-22. I’m so looking forward to hearing from them — there’s so much to talk about! You can sign up online or reach out to our team to register by emailing info@ccrcorp.com or calling 1.800.737.1271.
On Monday, the Department of the Treasury announced that it has issued the request for comment required by section 9(a) of the GENIUS Act. The announcement says:
This request for comment offers the opportunity for interested individuals and organizations to provide feedback on innovative or novel methods, techniques, or strategies that regulated financial institutions use, or could potentially use, to detect illicit activity involving digital assets. In particular, Treasury asks commenters about application program interfaces, artificial intelligence, digital identity verification, and use of blockchain technology and monitoring.
Innovative tools are critical to advancing efforts to address illicit finance risks but can also present new resource burdens for financial institutions. As required by the GENIUS Act, Treasury will use public comments to inform research on the effectiveness, costs, privacy and cybersecurity risks, and other considerations related to these tools.
Comments responding to this request should be submitted by October 17 and will be publicly viewable at www.regulations.gov.
As Meaghan recently acknowledged on The Mentor Blog, we’re at a point in the year when in-house legal teams may be tending to things like committee charters and corporate policies. If you are taking a look at your Code of Ethics, give this Morgan Lewis alert a read. It addresses compliance programs, oversight and governance, codes of ethics, reporting mechanisms, investigations, and code waivers and disclosures. After addressing the applicable regulatory frameworks, on the topic of “one code or many?” it says:
While the SEC allows different codes for different groups (e.g., executives, employees, board members), many compliance professionals recommend maintaining a single, comprehensive code for all personnel. Tailored training can then address the specific responsibilities of high-risk or gatekeeper functions, such as legal, finance, HR, or procurement.
Only one code that satisfies Item 406 of Regulation S-K requirements must be disclosed, and only the portions covering the required officers and topics need to be made publicly available to comply with SEC regulations.
It also has some practical & sometimes overlooked reminders to ensure that your Code of Ethics is both understandable and actively promoted. It suggests:
Publishing codes in multiple languages
Posting in PDF format with table of contents for searchability
Periodically reminding employees where to find the code and how to report issues
Ensuring codes are readable, ideally at an eighth- or ninth-grade level for broader comprehension
On Friday, the SEC sent a reminder that September 15, a key date for EDGAR Next, is (now less) than one month away.
In one month, on September 15, 2025, compliance with the EDGAR Next changes to EDGAR filer access and account management is required to continue to file on EDGAR uninterrupted. Filers must be enrolled in EDGAR Next or have been granted access on Form ID on or after March 24, 2025.
Enrollment will remain open through December 19, 2025, however, as of September 15, 2025, filers who have not enrolled or been granted access on Form ID on or after March 24, 2025 will be unable to file until they enroll.
– At a minimum, unenrolled filers should ensure NOW that they have a current CCC and passphrase which are required to enroll, as well as access to their EDGAR POC email box (in case the CCC and passphrase must be reset or confirmed as current).
– Unenrolled filers cannot change their EDGAR POC email after 10 p.m. September 12, 2025.
As Dave shared last week, stock buybacks are expected to top records in 2025. While the WSJ reported that buybacks are “particularly concentrated at the top, with the 20 largest companies accounting for almost half of repurchases,” I suspect there may be quite a few companies implementing share repurchase programs for the first time and trying to get their arms around structural and regulatory considerations. To that end, here’s a timely HLS blog penned by Cravath that discusses structuring share repurchase programs.
When looking at the alternatives – including, relatively simple open-market share repurchases (“OMR”), more complex accelerated share repurchase transactions (“ASR”) and a hybrid in between, enhanced open-market share repurchases (“eOMR”) – the blog suggests companies begin with these considerations:
– The level of control over the daily spend of the share repurchase activity;
– The ability to terminate the share repurchase activity;
– The ability to receive a large upfront delivery of shares;
– Whether to use a derivative transaction to effect share repurchase activity; and
– The ability for such share repurchase activity to qualify for the Rule 10b-18 safe harbor and/or constitute a Rule 10b5-1 plan.
The blog then considers OMRs, ASRs and eOMRs in detail. Here is a short summary of how these structures stack up against the above considerations:
OMRs provide the public company greater control over share repurchase activity and allow the share repurchase activity to be terminated at any time. But they don’t allow for a large upfront delivery of shares to be repurchased. OMRs are typically executed pursuant to the broker-dealer’s form of Rule 10b-18 agreement, and a Rule 10b5-1 plan can govern the terms of share repurchases if a company wishes to continue share repurchase activity through a closed window period.
ASRs offer a public company the ability to receive a large upfront delivery of shares to be repurchased plus certainty on the per-share repurchase price (discount to the average Rule 10b-18 VWAP during the term of an ASR (subject to any lookback option)). But it also means that it relinquishes control over the daily spend of share repurchase activity and the day the transaction will terminate. ASRs do not qualify for the Rule 10b-18 safe harbor but may be structured to reduce the risk of alleged manipulation. They are typically structured to meet the requirements of Rule 10b5-1.
In an eOMR, the public company relinquishes control over the daily spend but it retains the ability to terminate at any time (but, as described in the blog, the investment bank may be relieved from its reimbursement obligation for potential underperformance and the public company remains liable for the potential outperformance payment). An eOMR is typically structured to meet the requirements of Rule 10b5-1. It may qualify for the Rule 10b-18 safe harbor if it is structured so that the share repurchase activity is executed on an agency or riskless principal basis, where shares are repurchased in the open market.
