The Securities and Exchange Commission (the “SEC”) and Bitqyck, Inc. and its founders, Bruce E. Bise and Samuel J. Mendez (collectively the “Defendants”) reached a $10.1 million dollar settlement following allegations that the Defendants violated various securities laws in selling investors unregistered digital tokens. (Andrew Ramonas, Bloomberg Law). The SEC’s complaint alleged the Defendants violated the antifraud provisions and the registration requirements of the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”) and also separately violated the Exchange Act in running an unregistered securities exchange. (SEC Complaint). The settlement resulted in Bitqyck agreeing to pay disgorgement, prejudgment interest, and a civil penalty amounting to approximately $8.4 million, with Bise and Mendez individually paying approximately $890,000 and $850,000, respectively. (Andrew Ramonas, Bloomberg Law). As part of the settlement agreement, Defendants neither admitted nor denied wrongdoing in response to the SEC’s allegations. (Id.).
Read MoreIndirect Purchaser Plaintiffs v. Michael Bednarz (N.D. Cal.); 17-17367 (Ninth Circuit), derives from a multi-district litigation by both direct and indirect purchasers of lithium-ion batteries. The case implicates various manufacturers, including the three companies involved in this appeal: Hitachi Maxell, Ltd., LG Chem, Ltd, and NEC Corporation (the “Companies”). (Dorothy Atkins, Law 360). The litigation addresses the causes of action indirect purchasers have to redress injuries resulting from companies who manufacture components of their final goods sold. (Eleanor Tyler, Bloomberg Law). If this case goes before the Supreme Court, the Court will address indirect purchasers’ ability to redress their injuries.
Read MoreMany believe 2018 was a record year for shareholder activism. Since 2017, the number of activist campaigns increased by 5.5%, with about 268 campaigns announced in total (Melissa Sawyer, Lauren S. Boehmke, and Nathanial R. Ludewig, Harvard Law Review). In 2018, a record amount of capital was deployed in new activist campaigns and an unprecedented number of investors engaged in activism, with the number of first-time activists roughly doubling the 2017 numbers. However, these statistics do not tell the whole story (Melissa Sawyer, Lauren S. Boehmke, and Nathanial R. Ludewig, Sullivan & Cromwell LLP).
Read MoreElon Musk, the eccentric billionaire and aspirant Tony Stark, could find himself back in court after Tesla shareholders have asked the Ninth Circuit Court of Appeals to reinstate their claims against him. (Peter Hayes, Bloomberg Law). The shareholders allege that Mr. Musk personally profited off of a short-swing trade involving Tesla’s acquisition of SolarCity. Id. In July, a federal trial court had dismissed the shareholder’s lawsuit on the grounds that Musk could not be sued under federal securities laws for his actions. Id. The shareholders subsequently filed an appeal the following month. Id. This post will examine Tesla’s acquisition of SolarCity, the role that Elon Musk holds in each company and what the shareholder lawsuit is challenging.
Read MoreFive hundred eighty-one companies worldwide faced activist proposals in the first two quarters of 2019 (“H1”), also known as the “proxy season,” in which 80 percent of all public company annual meetings occur. (Activist Insight, Activist Insight Monthly June 2019). While shareholder activism in 2019 decreased relative to 2018, in general shareholder activism has been on the rise over the last decade. As the three largest asset managers in the United States, BlackRock, State Street, and Vanguard (the “Big Three”), are not to blame for this increase, this post explores who the most active shareholders are and the extent to which their goals were realized in the 2019 proxy season.
Read MoreEighty percent of all public company annual meetings are held during the first half of the year, from January 1 through June 30 (“H1”). (ProxyPulse, Broadridge). These first two quarters of the year are often referred to as the “proxy season” or “campaign season.” During this “season,” the majority of activist shareholder resolutions are proposed to management and, if resilient enough, are brought to a shareholder vote. Activist shareholders are individuals and institutional investors who initiate public campaigns as attempts to influence the management of companies in which they invest, typically in the realm of corporate governance, environmental, and social issues. Part I of this post will briefly summarize the activity by these shareholders in the 2019 season in relation to the record-breaking shareholder activism observed in 2018 and comment on the influence of the three largest asset managers in the United States. Part II will compare who the most active shareholders are, and what trends can be observed in the 2019 proxy season.
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