SEC settlement of Elan Musk Approved by Judge

A settlement agreement has been reached regarding the SEC Investigation of Elon Musk and his infamous Tweet stating that he was taking Tesla private. The tweet created an array of problems for the company since its publication. Under the settlement agreement, both Tesla and Musk will each pay a $20 million dollar fine and Musk will resign as Tesla’s Chairman for three years in order to resolve other pending charges arising from this incident. (Munsif Vengattil, Business Insider). The $20 million dollar fine assessed to Tesla was not for fraud, however, but rather, for the company’s failure to have any procedures or disclosure controls over Musk’s communication practices, i.e. his Twitter account. (Kirsten Korosec, TechCrunch). As a result of Musk’s resignation, Tesla will have to appoint two new independent directors to its board. (SEC Press Release). Nevertheless, despite the settlement agreement and the backlash that ensued over his Tweet, Musk will remain as Tesla’s Chief Executive Officer and more importantly, he will not have to admit or deny the allegations of the lawsuit.

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SEC Adopts Obama-Era Mining Disclosures

On October 31, 2018 the SEC adopted new mining disclosure requirements that were originally proposed under the Obama Administration. (Andrew Ramonas, Bloomberg Law). According to an agency press release, the amendments, which modify both the Securities Act of 1933 (Securities Act) and the Securities Exchange Act of 1934 (Exchange Act), will “provide investors with a more comprehensive understanding of a registrant’s mining properties, which should help them make more informed investment decisions.” (SEC, Press Release). The new rules eliminate and update Industry Guide 7, the current set of rules that have been called “woefully out of date.” (Anderson, Brenkert, and Doerksen, Dorsey & Whitney LLP).

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Best Buy's Acquisition of Health Tech Startup Jitterbug May Trigger HSR Concerns

On August 15, 2018, Best Buy Co., Inc. (Best Buy) announced that it signed a definitive agreement to acquire GreatCall Inc. (“GreatCall”) for $800 million as part of its growing business selling health and wellness products specifically focused on the aging population. (Investor Relations, Best Buy). GreatCall is the maker of the senior focused Jitterbug cell phones along with other devices designed to allow elderly consumers to connect with caregivers and to facilitate communication with emergency services. (Barba, Wall Street Journal). The acquisition is projected to be neutral to Best Buy’s adjusted earnings in 2019 and 2020 as well as to increase its adjusted earnings by 2021. (Investor Relations, Best Buy). The acquisition is part of Best Buy’s 2020 strategy to use technology to address key human needs among the aging U.S. population. (Barba, Wall Street Journal). GreatCall headquarters will remain in San Diego and David Inns will remain as the company’s CEO. (Press Release, Market Watch).

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Cryptocurrency Market in the UK

In September 2018, the United Kingdom’s Treasury Select Committee ("TSC") published the result of its months-long examination of the UK’s cryptocurrency sector. It provided regulatory recommendations to protect consumers and to prevent fraud and money laundering in the cryptoasset market (the “TSC Report,” House of Commons Treasury Committee Crypto-assets Report.) Certain industry players, led by the non-profit British Business Federation Authority (BBFA), objected to these recommendations. They argued the TSC’s proposed approach lacks nuance and will lead cryptomarket participants to flee the UK for jurisdictions with fewer regulations (William Suberg, Coin Telegraph.).

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Davis v. Skullcandy, Inc.: Defendant’s Motion to Dismiss Securities Fraud Claim Granted

In Davis v. Skullcandy, Inc., No. 2:16-cv-00121-RJS-PMW, 2018 BL 96655 (D. Utah Mar. 21, 2018), the United States District Court for the District of Utah Central Division granted Skullcandy, Inc. (“Skullcandy”), CEO Seth Darling ("Darling"), CFO Jason Hodell ("Hodell"), and board member Richard Allen’s ("Allen") (collectively the “Defendants”) motion to dismiss shareholder Melanie Davis’s (“Plaintiff”) securities fraud claim alleging Defendants mislead shareholders about Skullcandy's performance. The court held Plaintiff did not allege with particularity a violation of Section 10(b) or Section 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”).

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Instagram’s Founders Depart from Facebook, Inc.

On July 16, 2010, the CEO and co-founder of Instagram, Kevin Systrom, posted the very first photo to the social media platform, which depicted a golden retriever next to a taco stand. (Olivia Waxman, The New York Times). Within 18 months, Facebook, Inc. purchased Instagram, and nearly 8 years after Instagram’s inception, the co-founders of Instagram, Kevin Systrom and Mike Krieger, announced their resignation from Facebook, Inc. in a New York Times article. (Mike Isaac, The New York Times).

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