Securities and Exchange Commission Chairman Gary Gensler will appear before lawmakers on Tuesday to discuss the agency’s plan to regulate crypto.
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3 Companies Cut Their Outlooks. Why Their Stocks Can’t Be Counted Out. | Barron’s
PPG lowered its sales number by $250 million, according to a filing with the Securities and Exchange Commission.
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Ross Pazzol, Former Assistant General Counsel at CME, Joins Murphy & McGonigle
Second Former CME Group Attorney to Join Chicago OfficeCHICAGO, Sept. 13, 2021 /PRNewswire/ — Financial services law firm Murphy & McGonigle announced today the addition of a new Partner to its Chicago office, Ross Pazzol, an accomplished financial services lawyer who brings experience to clients from both the Chicago Mercantile Exchange and the Securities and Exchange Commission. Mr. Pazzol joins from CME Group, where he served as Assistant General Counsel for the past five years.Ross PazzolMr. Pazzol is the second alumnus from CME Group, the world’s largest financial derivatives exchange, to recently join the firm’s Chicago office; former Senior Enforcement Counsel William E. Walsh joined in July. At CME, Mr. Pazzol represented the Exchange in connection with various CFTC and Federal Reserve Board examinations, and in connection with its implementation of complex liquidity, collateral, and custody arrangements.”We’re thrilled to have Ross join our growing Chicago office,” said Harris Kay, Managing Partner of Murphy & McGonigle in Chicago. “He is an extremely talented lawyer, and his experience at CME Group and, before that, at the SEC will further bolster our market-leading practices, including our Broker-Dealer, Trading & Markets, and Commodities, Futures & Derivatives groups.”Mr. Pazzol will advise firm clients regarding compliance with CFTC, SEC, and Federal Reserve Board regulations. His experience includes advising clearing organizations, exchanges, hedge funds, and proprietary trading firms, and analyzing the treatment of financial market contracts under the Bankruptcy Code and other similar laws. At CME, he represented the Collateral and Banking team in connection with CME’s $7 billion syndicated credit facility, its implementation of new collateral, banking and settlement arrangements, and its analysis of repo trading and clearing arrangements.”I am delighted to join the talented team at Murphy & McGonigle and to help grow the new Chicago office,” said Mr. Pazzol. “The firm’s focus and leadership in the financial services industry is well-recognized, and further strengthening the offering to clients in Chicago is truly exciting to me.”Story continuesIn addition to previously serving as a partner at a leading national law firm, Mr. Pazzol spent two years in the SEC’s Division of Market Regulation as a Staff Attorney. He is the 16th lawyer at Murphy & McGonigle to previously have served at the SEC. Three others served at the CFTC.An alumnus of Loyola University of Chicago School of Law and the University of Illinois, Mr. Pazzol is a member of the Futures Industry Association Law and Compliance Division.About Murphy & McGonigleMurphy & McGonigle serves the regulatory counseling, enforcement defense and high-stakes litigation needs of clients across the full spectrum of the financial services industry – from investment banks and commercial banks, broker-dealers, investment advisers, and hedge funds, to national and international securities markets and exchanges as well as digital asset trading platforms and Fintech innovators. Many of the firm’s partners formerly served in senior positions at the U.S. Department of Justice, SEC, FINRA, and the CFTC, and several served in senior executive positions in major financial institutions on Wall Street.The Firm was recognized as “Law Firm of the Year” for Securities Regulation in 2021 by U.S. News – Best Lawyers. Murphy & McGonigle operates in New York, Washington, DC, Virginia, Chicago and San Francisco.Media Contact: Mark Curran [email protected] 212.880.3989Murphy & McGonigleCisionView original content to download multimedia:https://www.prnewswire.com/news-releases/ross-pazzol-former-assistant-general-counsel-at-cme-joins-murphy–mcgonigle-301375589.htmlSOURCE Murphy & McGonigle, P.C.
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Crypto news: Elon Musk tweets shiba inu, Walmart debunks litecoin news – CNBC
On Tuesday evening, Brian Armstrong, the CEO of Coinbase, tweeted that the Securities and Exchange Commission (SEC) intends to sue the …
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SEC: MML Investors Services Didn’t Disclose Mutual Fund Revenue Sharing Conflicts
MML Investors Services, a dually registered investment advisor and broker/dealer and subsidiary of MassMutual Holdings, settled charges with the Securities and Exchange Commission alleging the firm financially benefited from an agreement with their clearing broker when recommending certain mutual fund share classes without disclosing those conflicts to clients.
Springfield, Mass.-based MML has been registered as an IA since 1993 and b/d since 1982. It has about $49 billion in regulatory assets under management, according to the commission’s settlement order filed last Friday. The allegations in the order also concerned MSI Financial Services, a former dual-registrant that was integrated into MML in 2017.
Mutual fund sponsors paid the unnamed and unaffiliated clearing broker used by MML a recurring fee so the share classes of funds they advised would be offered in the broker’s mutual fund programs, according to the SEC order. The clearing broker had both a no-transaction-fee mutual fund program, as well as a program in which investors would have to pay such transaction fees.
But the share classes in the non-transaction-fee program often had higher expense ratios with higher recurring fees paid by investors to the clearing broker than other share classes offered outside of that program, according to the commission. Starting in Oct. 2015 through Feb. 2017, MSI received revenue sharing from that program, while MML financially benefited between Mar. 2016 and Feb. 2017, and started again in Oct. 2018, according to the order.
The broker’s mutual fund program with transaction fees also paid revenue sharing to MML and MSI on some share classes, and those share classes similarly had higher expense ratios and higher fees than other options offered by the broker outside the program. Starting in 2015, the clearing broker had an agreement with MML and MSI that the broker would share its revenue with them based on the amount of their customers’ assets invested in the mutual fund programs, according to the SEC.
“The payments (MML) and MSI received under the agreement created an incentive for (MML) and MSI to recommend or favor mutual funds covered by the agreement over other investments, including lower-cost share classes of the same mutual fund where rendering investment advice to clients,” the SEC order read.
From 2015 to 2017, MML and MSI disclosed in written materials that the clearing broker offered a mutual fund program without transaction fees and that mutual funds would often pay a fee to the clearing broker, part of which would be shared with the advisory firms. But MML nor MSI disclosed the conflicts, including that the firms were incentivized to favor certain mutual fund share classes over others, according to the SEC. The two firms also didn’t disclose that they received revenue sharing from the broker’s mutual fund program that included transaction fees, according to the order.
Beginning in Oct. 2018 through December of the following year, MML received about $2.5 million in revenue sharing from their arrangement with their clearing broker, though it did not disclose this to clients, according to the SEC. During the investigation by the commission, MML credited the approximately $2.5 million raised during that time back to clients.
“MML Investors Services takes this matter very seriously and cooperated fully with the SEC,” Paula Tremblay, a spokesperson for MML Investors Services, said. “Similar to other industry participants, we have reimbursed impacted accounts and are pleased to have resolved this matter.”
Starting in Jan. 2020, the firm changed its client brochures, indicating that it would “periodically review the universe of share classes that it offers” and make only one recommendation or clients; it would also amend clients’ investments if they were found to be invested in a certain share class when a more “favorable” option was available, according to the commission.
Though the firm didn’t admit or deny the allegations in the order, MML agreed to a censure and a cease-and-desist, as well as $2.1 million in disgorgement, prejudgment interest and a civil penalty of $700,000.
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SEC Nabs $539M Settlement With Chinese Billionaire’s Groups – Law360
By Dean Seal (September 13, 2021, 1:19 PM EDT) — A media venture tied to former Donald Trump adviser Steve Bannon and exiled Chinese billionaire Guo Wengui, along with another Guo-linked media firm, will pay $539 million to resolve alleged securities violations related to fundraising, the U.S. Securities and Exchange Commission said Monday.The political content platform GTV Media Group Inc., reportedly launched by Bannon and Guo last year, along with its parent company and a connected firm called Voice of Guo Media Inc. agreed to settle the regulator’s allegations that they raised nearly half a billion dollars through unregistered offerings of both stock and digital assets.
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Borrowing Against Crypto Is Growing – Is it Safe?
geckophotos / Getty Images/iStockphotoMore and more borrowers are turning to cryptocurrency to buy homes, cars and sometimes even more crypto. Startup nonbank lenders and automated, blockchain-based platforms take deposits in the form of cryptocurrency. These deposits earn higher interest rates, reports The Wall Street Journal, and are used to fund loans to borrowers who use crypto to back the loan. Borrowers can take out cash or stablecoins, depending on the lender.See: Crypto, Stocks or Real Estate? Where To Put $10,000 Right NowFind: How Crypto Assets Are Regulated — and How They Are NotCrypto banking is growing. One group of crypto lenders has $25 billion in outstanding loans to individuals and institutional clients, up from $1.4 billion just one year ago, according to the crypto research firm Messari.Cryptocurrency lenders take a similar approach as traditional banks, The New York Times noted. Deposits are pooled to offer loans and give interest to depositors. However, banks are required by law to have reserves to make sure that if some loans go bad, customers are still able to withdraw funds. Crypto lenders are not held to this same standard. Additionally, because transactions are backed by digital assets, crypto loans generally involve no credit checks.People are using crypto-backed loans to benefit from rising prices without reducing the size of their bets, according to WSJ. However, there are risks.Crypto loans are normally for a percentage of pledged holdings. If the value of the collateral takes a hit, the lender can issue a margin call and seize it all. If the lender should go out of business or fall victim to a cyberattack, federal insurance isn’t there to act as a safety net for depositors.+See: How To Invest In Bitcoin: 4 Steps To Get StartedFind: Comparing Dogecoin, Baby Doge and Shiba Inu: Is There One To Watch?These very real risks have drawn the attention of regulators, noted WSJ. The Securities and Exchange Commission is investigating Coinbase, a crypto exchange platform, over a lending program the company plans to market. According to a separate WSJ report, the SEC stated the activity would make up a type of investment that needs to be registered with the government under investor-protection laws.Story continuesMany crypto developers are pushing back, saying that SEC oversight doesn’t fit their technology and trading programs.More From GOBankingRatesThis article originally appeared on GOBankingRates.
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SEC seeks risked based rules to deepen capital market – Vanguard News
By Peter Egwuatu. The Securities and Exchange Commission, SEC, has initiated a risk based management rule in the Nigerian capital market.
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Freshworks to raise up to $912 million from US-IPO
BENGALURU : Software-as-a-service (SaaS) company, Freshworks Inc., which filed for its initial public offering (IPO) last month with the US Securities and Exchange Commission (SEC), now plans to raise upto $912 million as a part of its listing, latest regulatory filings by the company show.
In its latest filing with the SEC on Monday, Freshworks said that the company looks to offer 28.5 million Class A common shares at an offer price range of $28 to $32 per share. With this, Freshworks will look to raise between $798 million to $912 million, as a part of its public listing.
The company is also seeking a valuation of almost $9 billion, on the upper end of the price band, as a part of the listing, its regulatory filings show.
This will make Freshworks the most valuable SaaS startup from India, post-listing, zooming past the likes of application program interface (API) development platform, Postman, which recently was valued at $5.6 billion and mobile application testing platform, BrowserStack valued at $4 billion this year.
Freshworks was last valued at $3.5 billion in November 2019.
“We have two classes of authorized common stock: Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote. Each share of Class B common stock is entitled to 10 votes and is convertible at any time into one share of Class A common stock,” said Freshworks Inc., in its filing.
“Outstanding shares of Class B common stock will represent approximately 98.9% of the voting power of our outstanding capital stock immediately following this offering, with our directors, executive officers, and principal stockholders representing approximately 78.3% of such voting power,” read Freshworks’ filings with SEC.
The 11-year old software-as-a-service (SaaS) startup has appointed Morgan Stanley, J.P.Morgan, BofA Securities, Jeffries and Barclays as book managers to the IPO, among others.
Mint had earlier reported that Freshworks was looking to use the proceeds from the IPO for general corporate purposes, including catering to working capital needs, operating expenses and capital expenditures.
The company was also looking to use a portion of the net proceeds for acquisitions or strategic investments in complementary businesses, products, services or technologies.
“Freshworks is a very special company. We were unconventional from the beginning – not for its own sake, but because we saw an opening in the market for a unique approach […] We offered a ‘fresh’ approach relying on efficient, product-led, low-cost, and low-touch sales; and we targeted massive, underserved markets. And we had one simple mantra: happy employees create happy customers. In fact, we made that our mission,” said Freshworks’ founder Girish Mathrubootham, in a letter, as a part of the IPO filings.
Freshworks Inc. will be the first to lead the pack of Indian startups which are actively looking to list on the US exchanges in the coming months. Names include payments service provider Pine Labs, e-commerce behemoth, Walmart-owned Flipkart as well as mobile advertising major, InMobi.
Freshworks has raised more than $327 million in funding till date from the likes of Accel, CapitalG, Sequoia India, and Tiger Global Management. It has more than 52,500 customers across 120 countries.
The company reported a revenue jump of roughly 45% between calendar year 2019 and 2020. For 2020, the overall revenues for the firm stood at almost $250 million. The company reported an 84% increase in net losses between 2019 and 2020. For Freshworks, the losses for calendar year 2020 stood at $57.3 million.
However, the company has made concerted efforts to reduce its losses in 2021. For six months ending 30 June, Freshworks’s net losses stood at $9.84 million in 2021, an 83% drop from the $57 million net loss it reported for the same period in 2020.
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American Hospitality Properties REIT Declares Special Common Stock Dividend
DALLAS, Sept. 13, 2021 /PRNewswire/ — American Hospitality Properties REIT, Inc. announced that the Company’s board of directors declared a special cash dividend of $0.20 per share of its common stock. The dividend is payable on October 15, 2021, to stockholders of record on September 30, 2021.
W.L “Perch” Nelson, Chairman and Chief Executive Officer of American Hospitality REIT, noted, “This dividend is intended to provide our stockholders with an initial return on their investment while we continue to raise capital that we expect to use to acquire hospitality assets.”
For additional information, please contact Audrey Kamin, Senior Vice President, Distribution, National Accounts Manager at 858.243.3977 or visit www.phoenixamericanhospitality.com
About American Hospitality Properties REIT
American Hospitality Properties REIT, Inc. was formed to invest in limited and upscale select service hotels in the United States. Substantially all of the Company’s assets will be held by, and substantially all of the Company’s operations will be conducted through, its operating partnership, of which the Company is the sole general partner. The Company intends to qualify as a REIT for U.S. federal income tax purposes beginning with its taxable year ending December 31, 2020.
Forward-Looking Statements
This press release includes “forward-looking statements” that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release, which are not strictly historical statements, including, without limitation, statements regarding management’s plans, objectives and strategies, constitute forward-looking statements. Such forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statement, many of which may be beyond our control, including, without limitation, those factors described under the caption “Risk Factors” in the Company’s Offering Statement on Form 1-A filed with the Securities and Exchange Commission. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
View original content to download multimedia:https://www.prnewswire.com/news-releases/american-hospitality-properties-reit-declares-special-common-stock-dividend-301375424.html
SOURCE American Hospitality Properties REIT, Inc.
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Definitive Healthcare Announces Increase in Initial Public Offering Price Range | Business Wire
… Form S-1 with the Securities and Exchange Commission (“SEC”) pursuant … be obtained from the SEC at www.sec.gov or from: Goldman Sachs & Co.
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Media companies linked to Chinese exile Guo Wengui reach $539 million SEC settlement – CNBC
– Guo was introduced by Steve Bannon, former White House Chief Strategist. Don Emmert | AFP | Getty Images.
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Bannon-Linked Media Firm Is Part of $539 Million SEC Case
A media firm linked to Steve Bannon and exiled Chinese businessman Guo Wengui was among companies that agreed to pay more than $539 million to settle a U.S. regulator’s claims that the businesses illegally sold shares.
GTV Media Group Inc., which has ties to Bannon and Guo, sold shares between April and and June 2020 without registering the offering, the U.S. Securities and Exchange Commission said in a Monday statement. The SEC also accused Saraca Media Group Inc. and Voice of Guo Media Inc. of participating in the misconduct.
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This crypto looking to solve the SEC crackdown is up 6,000% in 2021
The U.S. Securities and Exchange Commission (SEC) signaled a big change in policing cryptocurrencies last week, as one of the largest crypto exchanges in the world revealed it was blocked from launching a new crypto lending product.As Coinbase CEO Brian Armstrong explained, the SEC took issue with the company’s plans to pay interest to customers so they could earn up to 4% on their crypto assets. The particular crypto asset Coinbase was preparing to offer 4% on was the least volatile asset it offers, a stablecoin called USDC, which attempts to stay pegged in value to $1.As Armstrong also bemoaned on Twitter, other crypto companies have been lending and offering interest on crypto holdings, like bitcoin, ether, and USDC for years. BlockFi, for example, currently offers 8% interest on the stablecoin issued by the famed Winklevoss twins. But as anyone watching the crypto space would know, regulators have increasingly been talking about a need to crack down on exactly that practice. Officials at the Federal Reserve, for example, have even called out USDC’s competitor, Tether, for potentially posing a risk to the traditional financial system if investors ever rushed to redeem their tether tokens for $1.The reason being, as Boston Fed President Eric Rosengren laid out back in June, is that neither Tether nor USDC were fully backed by an equivalent amount of dollars in a bank. While Coinbase and Tether’s issuer each marketed that both coins were backed 1-for-1 by dollars in the bank, in reality they both held a mix of cash and assets that included bonds and corporate debt that could decline in value. Theoretically, if those other assets were to rapidly drop in value, investors might rush to redeem tokens for dollars sparking the crypto equivalent of a bank run, Rosengren said.Circle, the company behind USDC, recently announced it would be shifting to only holding cash and short-term Treasuries to back its stablecoin. That same day, Coinbase apologized for marketing that USDC was safely backed by dollars in the bank even though it wasn’t. Tether still holds riskier assets as collateral though it has published more information on what it holds to back its stablecoins as part of a settlement with the New York district attorney’s office.Story continuesAnd frankly, it’s all a problem for crypto.Not just the fact that an industry that’s so proud of breaking away from the chains of the traditional financial system is still so dependent on it — but also the fact that regulators could have an easy way of blocking the stablecoin on-ramp that has fueled the flow of cash into crypto. In total, the market cap of stablecoins has swelled from about $20 billion at the start of the year to $120 billion now. Most of that has been driven by Tether and USDC, growing their market caps this year by 221% and 538%, respectively. While they remain the two largest stablecoins at about $66 billion and $26 billion, respectively, there is a newcomer that’s growing quicker than both of them.Top stablecoins Tether and USDC have seen their market caps swell so far in 2021. Investors often shift to holding stablecoins during times of volatility instead of cashing out into physical dollars.As its founder Do Kwon told Yahoo Finance this week, it’s not backed by cash. It’s not backed by bonds. It’s not backed by anything that would touch the traditional banking system. Instead, Terra Labs’ UST stablecoin is backed by another paired cryptocurrency which gets burned or converted to maintain the same $1 peg.”The reason why this is valuable, is there’s a lot of regulatory movements coming from jurisdictions all across the world to sensor the underlying bank accounts under stablecoins,” he said. “The reason why the decentralized currencies like Terra are important and gaining lots of attention is because it’s free from those things in the sense that because there’s no underlying censorable deposit, the logic that’s governing the monetary policy of these stablecoins are entirely free from censorship.”Terra’s UST has seen its market cap swell from $181 million at the start of the year to $2.5 billion as of September, a growth rate of more than 1,200%. It’s now the world’s fifth largest stablecoin and is making inroads at becoming more frequently used in decentralized finance, or DeFi, applications that enable investors to earn interest on their crypto holdings, similar to what Coinbase was setting out to do before being blocked by the SEC. As Kwon notes, while some decentralized applications might not be able to get shut down by regulators like Coinbase, they could still be censored if the stablecoins they use on their platforms are attached to the banking system.”Even if the sort of the logic for these DeFi applications are decentralized, if the underlying money can be censored, then it kind of defeats the purpose entirely,” he said.Terra’s UST stablecoin has seen its market cap grow much faster than the rate posted by the two largest stablecoins this year.Of course, it’s worth noting that stablecoins like UST that aren’t backed by real assets (dubbed algorithmic stablecoins) are inherently risky. Earlier this year, one such project, IronFinance, saw the cryptocurrency backing it crash from $60 to $0. It even ensnared the likes of Shark Tank’s Mark Cuban, who lost money in the project and later called on regulators to do more to protect investors. For a number of reasons though, including a $25 million investment from crypto power broker Galaxy Digital and Terra’s robust payment system used by more than 3 million people in South Korea, Kwon says his project is different from others that have failed.”There are a lot of algorithmic stablecoins out there and to our critics’ credit, most of them have failed,” he said. “The reason for that is in building an algorithmic stablecoin, the main challenge isn’t to design some clever algorithm… but it’s really about building the use cases around the economy.” To that end, Terra has built out an ecosystem to leverage its UST stablecoin. It now offers a savings platform that offers 20% interest on its stablecoins called Anchor. It also offers tokens that mimic exposure to U.S. stocks, giving access to investors around the globe that otherwise might not be able to trade in the country. Its payment app through South Korea’s PayPal-like Chai, which launched about two years ago, powers more than $1 billion in payments a year.”I think these use cases sort of reinforce the stability of the Terra stablecoin and make it more useful as a currency overall,” Kwon said.As more money has flowed into UST, the cryptocurrency backing it, Luna, has appreciated nearly 6,000% year-to-date. In May, however, when bitcoin’s price collapsed by about 40%, Luna suffered a nearly 80% crash. Investors began to panic as the UST stablecoin deviated from its $1 peg to fall to about 89 cents. For comparison, during the financial crisis in 2008, the U.S. financial system nearly entered meltdown mode when one popular reserve fund “broke the buck” to fall from its $1 net-asset value peg to just 97 cents. The Fed stepped in to save the day, but no such central bank exists for crypto.During last week’s crypto flash crash, which saw bitcoin briefly collapse more than 10%, Luna dropped about 20%, but UST held steady at $1, prompting a one-word tweet from Terra’s founder.”Poetry,” he tweeted.Zack Guzman is an anchor for Yahoo Finance Live as well as a senior writer covering crypto, cannabis, startups, and breaking news at Yahoo Finance. Follow him on Twitter @zGuz.
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SEC fines media firms over $539 million for illegal securities offerings
By Chris Prentice, Susan Heavey2 Min ReadREUTERS/Andrew Kelly(Reuters) – Three media companies have agreed to pay more than $539 million to settle U.S. Securities and Exchange Commission (SEC) charges over illegal offerings of stock and digital assets, the regulator said on Monday.The SEC charged New York-based GTV Media Group Inc. and Saraca Media Group Inc and Phoenix-based Voice of Guo Media Inc with the illegal unregistered offering of GTV common stock. GTV and Saraca were also charged with the illegal unregistered offering of a digital asset security called G-Coins or G-Dollars.Attorneys for the companies, which did not admit or deny the SEC’s findings, did not respond immediately to requests for comment.The firms solicited thousands of individuals to invest in the GTV stock offering from April through June 2020 through the firms’ websites and on social media platforms, according to the SEC. GTV and Saraca also solicited individuals to invest in the digital asset offering. Altogether, the firms raised about $487 million from more than 5,000 investors through the offerings.To settled the charges, GTV and Saraca agreed to disgorge over $434 million plus prejudgment interest of approximately $16 million, and to each pay a civil penalty of $15 million, the SEC said.Voice of Guo also agreed to a cease-and-desist order, to pay disgorgement of more than $52 million plus prejudgment interest of nearly $2 million, and to pay a civil penalty of $5 million.
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