Category Archives: Market Abuse

SEC’s Newest Task Force Takes Cross-Border Aim

by Jina L. Choi, Gabriela Li, David Woodcock, and Emily Rumble

From left to right: Jina L. Choi, Gabriela Li, David Woodcock, and Emily Rumble (photos courtesy of Gibson, Dunn & Crutcher LLP)

In line with the Trump Administration’s America First Investment Policy and perhaps in response to entreaties from Congress and state regulators to protect the U.S. capital markets from unscrupulous foreign actors, the SEC announced the formation of a Cross-Border Task Force within its Division of Enforcement on September 5, 2025.[1] The task force will focus on investigating foreign-based issuers for potential market manipulation, such as pump-and-dump and ramp-and-dump schemes, and will increase scrutiny of gatekeepers, particularly auditors and underwriters, who help foreign issuers access the U.S. capital markets. The statement notably singles out China as a jurisdiction where governmental control and other factors pose unique investor risks.

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Recent Developments in the Law of Federal Property Fraud: It’s a Long and Winding Road

by James Joseph Benjamin Jr., Katherine R. Goldstein, Michael A. Asaro, and Parvin Daphne Moyne

Left to right: James Joseph Benjamin Jr., Katherine R. Goldstein, Michael A. Asaro, and Parvin Daphne Moyne (photos courtesy of Akin Gump Strauss Hauer & Feld LLP)

In two recent high-profile decisions, Chastain v. United States and Johnson v. United States, the U.S. Court of Appeals for the Second Circuit reversed wire fraud convictions that were based on theories resembling insider trading.[1] In both cases, the government invoked the wire fraud statute, and not a securities fraud statute, because the products at issue (non-fungible tokens and spot foreign currency) were not securities. These cases mark the latest developments in a long-running, ongoing and sometimes head-spinning debate in the courts concerning the breadth of the federal property fraud statutes.

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Major Takeaways from the CFTC Whistleblower Program’s 2024 Annual Report

by Andrew Feller and Geoff Schweller

Andrew Feller and Geoff Schweller (photos courtesy of Kohn, Kohn & Colapinto, LLP)

On November 15, the U.S. Commodity Futures Trading Commission (CFTC) released its annual report on its Whistleblower Program and Customer Education Initiatives for the 2024 fiscal year. Since it was established in 2010, the CFTC Whistleblower Program, which offers anonymous reporting channels and monetary awards to commodities whistleblowers, has grown into a critical piece of the CFTC’s enforcement arsenal.

The report details what was a record year for the CFTC Whistleblower Program, with the highest-ever number of both whistleblower tips and award applications received and the most award orders issued in a single fiscal year. Ironically, however, due to its growth and success, the program faces a funding crisis threatening to undermine the program.

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SEC Acting Director of Enforcement Delivers Remarks at PCCE’s Fall Conference

On November 22, 2024, the NYU Law Program on Corporate Compliance and Enforcement (PCCE) hosted a conference titled “New Directions in Corporate and Individual Enforcement.” At the conference, Sanjay Wadhwa, Acting Director of Enforcement, Securities and Exchange Commission (SEC), delivered remarks on the SEC’s enforcement priorities and enforcement policy, which are reprinted below and available on the SEC’s website here. After his remarks, Wadhwa participated in a fireside chat with PCCE’s Executive Director, Joseph Facciponti.

Sanjay Wadhwa (©Hollenshead: Courtesy of NYU Photo Bureau)

Good afternoon. Thank you to the Program on Corporate Compliance and Enforcement for the opportunity to speak to you all.

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Crypto Experts React to Recent SDNY Ethereum Fraud Indictment

The NYU Law Program on Corporate Compliance and Enforcement (PCCE) is following the U.S. Attorney’s Office for the Southern District of New York’s recent indictment of two individuals for allegedly attacking and stealing $25 million from the Ethereum blockchain. The indictment in the case, United States v. Peraire-Bueno, 24 Cr. 293 (SDNY), is available here. Below, several crypto experts and former prosecutors provide their reactions to the case.

Left to right: Maria Vullo, Daniel Payne, Elizabeth Roper, Usman Sheikh, Justin Herring, and Robertson Park (photos courtesy of the authors)

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The Luring Test: AI and the Engineering of Consumer Trust

by Michael Atleson

Federal Trade Commission

In the 2014 movie Ex Machina, a robot manipulates someone into freeing it from its confines, resulting in the person being confined instead. The robot was designed to manipulate that person’s emotions, and, oops, that’s what it did. While the scenario is pure speculative fiction, companies are always looking for new ways – such as the use of generative AI tools – to better persuade people and change their behavior. When that conduct is commercial in nature, we’re in FTC territory, a canny valley where businesses should know to avoid practices that harm consumers.

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Semiconductor Chips and Cloud Computing: A Quote Book

by Staff at the Federal Trade Commission’s Office of Technology

The FTC’s Tech Summit on AI[1] highlighted three panels that reflect different layers of the AI tech stack – hardware and infrastructure, data and models, and front-end user applications. Here, we publish the first in a three-part series of “Quote Books” summarizing each of the three panels. This first quote book is focused on hardware and infrastructure, including semiconductor chips and cloud computing.

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A Singular(ity) Challenge: Compliance and Enforcement in Financial Markets in the Age of Artificial Intelligence

by Douglas K. Yatter and Hanyu (Iris) Xie

Douglas K. Yatter and Iris Xie (Photos courtesy of Latham & Watkins LLP)

With the sudden arrival in the public consciousness of generative artificial intelligence (AI) tools like ChatGPT, it has become commonplace to observe that the rapid advancement and adoption of AI has the potential to reorder large portions of human economic, social, and artistic activity. The ability of AI technologies to analyze, learn from, and utilize vast amounts of data with less and less human intervention or control may create opportunities and challenges in equal measure. In the financial services industry and financial markets, where use of code has long been essential for data analysis and automation, AI is an evolutionary next step that may test the limits of our existing framework for compliance and enforcement.

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White Collar Defense Attorneys React to DOJ and SEC Enforcement Actions for Misuse of 10b5-1 Plans

Editor’s Note: Recently, both the DOJ and the SEC brought, for the first time ever, criminal and civil insider trading charges against a corporate executive for his alleged fraudulent misuse of a 10b5-1 trading plan, which typically allows corporate insiders to pre-schedule sales of company shares to avoid accusations of insider trading. In this post, several former federal prosecutors and white collar defense attorneys provide their reactions to this case and its implications for future insider trading cases.

Top row from left to right: Brian Jacobs, Gina Parlovecchio, Rachel Maimin, and Kathleen McGee.
Bottom row from left to right: Robert Johnston, Marc Rein, and Katherine Goldstein. (photos courtesy of authors’ respective firms)

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Regulatory Priorities at the ABA White Collar Conference: Market Protection, Crypto, and ESG

Editor’s Note: the NYU Program on Corporate Compliance and Enforcement is publishing reactions to the American Bar Association’s annual White Collar Crime National Institute in Miami on March 2 and 3, 2023.

by Robertson Park

Robertson Park (photo courtesy of Davis Wright Tremaine LLP)

The ABA White Collar Conference this year offered a slightly more forthcoming group of government agency representatives from the DOJ, SEC, and the CFTC. Maybe it was the lifting of the pandemic fog, and maybe it was the March heat in Miami, but it was certainly a more assertive and transparent government narrative. The arc is clearly up across the enforcement and regulatory landscape. The enforcement panel reminded me of the movie The Graduate, where Dustin Hoffman is presented the distilled single word of advice –“Plastics.” The enforcers weren’t focused on one word of advice, but equally focused on several — “protect markets” — “Crypto”— and “ESG.” The first two are already apparent in ongoing and recent investigations and prosecutions. The latter presents a more troubling landscape for companies.

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