Securities Regulation Daily Wrap Up, WORTH NOTING—Other litigation, regulatory activity and industry news, (Jul 18, 2025)

By WK Editorial Staff

A weekly roundup of other items of interest to the securities, commodities, and corporate governance communities.

SEC NEWS AND SPEECHES—SEC Chair Paul Atkins said he has supported consolidation of the SEC and CFTC “for years,” and that consolidating the agencies “makes a lot of sense, especially with potentially overlapping jurisdictions.” However, Atkins said, “that’s not the primary job that we have before us,” and the SEC has to “work hand in glove to make sure the two agencies are completely in sync.” Atkins was responding to a question from Maria Bartiromo in a July 17 interview on Fox Business about crypto regulatory frameworks at the SEC and CFTC in light of the House passage of the Digital Asset Market Clarity (CLARITY) Act of 2025 (H.R.3633). Bartiromo also asked Heath Tarbert, president of stablecoin issuer Circle and former CFTC chairman, if the SEC should “acquire the CFTC.” Tarbert responded, “Or perhaps the other way around; many market participants would say that.” Tarbert added that at this time, “getting the law right for the industry and the American people is more important than Washington housekeeping.”

FRAUD AND MANIPULATION—The Second Circuit affirmed a ruling from the Southern District of New York awarding summary judgment to a defendant on the grounds that the transaction in question did not constitute a “purchase” under Section 16(b). The defendant, through a company he owned, invested in WG Biotech ApS, an investment vehicle majority-owned by a friend of the defendant and formed solely to hold shares of Y-mAbs Therapeutics. In March 2021, the company owned by the defendant conveyed 20,565 shares of WG Biotech to WG Biotech in exchange for 1,029,927 common shares of Y-mAbs. The plaintiff alleged that at the time of the exchange, the fair market value of Y-mAbs common shares was $35.30 per share. He further alleged that in the six-month period prior to and following the March 2021 transaction, the defendant sold 212,000 Y-mAbs common shares, realizing over $2.5 million in short-swing profits. The Second Circuit agreed with the district court that, given the circumstances of the case, the defendant’s insider status did not give him the opportunity to manipulate the terms of the transaction, at the time of the settlement of the transaction, to be more favorable to him (Donoghue v. Gad, No. 24-2321 (2d Cir. July 14, 2025)).

CFTC NEWS AND SPEECHES—The CFTC’s Office of Inspector General (OIG) reported it has reviewed CFTC nondisclosure policies, forms, and agreements to assess their compliance with the Whistleblower Protection Enhancement Act of 2012 (WPEA), which requires the inclusion of specific language concerning whistleblower disclosure rights. The OIG also reviewed the CFTC’s websites for compliance with WPEA posting requirements. It found that 1) Current CFTC nondisclosure policies, forms, and agreements include the required whistleblower disclosure statement and comply with the WPEA; 2) Some employment-related settlement agreements in use by the CFTC prior to April 2023 did not include the required whistleblower disclosure statement but have been corrected; 3) The CFTC’s websites (the public-facing site and the agency intranet site) lacked the whistleblower disclosure statement required by the WPEA, which the agency also corrected. Commenting on the review, Acting Chairman Caroline Pham said she was pleased with the OIG’s assessment. “Whistleblowers are critical to promoting a well-functioning government, and I applaud the agency's efforts to make these protections abundantly clear,” Pham said.

CFTC NEWS AND SPEECHES—The CFTC’s Division of Market Oversight is amending CFTC Letter No. 14-130 to allow Victoria University of Wellington, New Zealand, to transfer operation of its events market to the Prediction Market Research Consortium, Inc. (PMRC), a U.S.-based not-for-profit corporation that has applied to the IRS for recognition as an educational and research entity under Section 501(c)(3) of the Internal Revenue Code. According to the letter, PMRC will make decisions regarding what contracts to list on the market through a board of academics from U.S. universities who may receive compensation appropriate for directors of not-for-profits under applicable state and federal law. The Division said it understands that PMRC may use fees generated by trading to pay the board’s compensation, the expense of operating the market, and to conduct and promote research in prediction markets. Further, PMRC may contract with for-profit entities, including PredictIt’s current market servicer, Aristotle International, Inc. Finally, Victoria University will cease operating any U.S.-based prediction market upon its transfer to PRMC.

INVESTOR EDUCATION—The SEC’s Office of Investor Education and Advocacy (OIEA) issued an Investor Alert warning of investment scams related to the recent Texas floods and other natural disasters. The SEC cautioned that fraudsters may manipulate victims by claiming that investments will benefit disaster victims. They may also specifically target individuals who receive money from insurance companies, and may falsely claim to be affiliated with state and federal governments or large, well-known companies. The SEC encouraged investors to check registrations on Investor.gov and report possible securities fraud at sec.gov/tcr.

LAW FIRM NEWS—Former SEC Assistant Chief Litigation Counsel John Amberg joined Apex Financial Group as chief compliance officer. Amberg most recently acted as global chief compliance and ethics officer at Northern Trust Corporation and previously held other roles at Northern Trust, Motorola Solutions, and Kirkland & Ellis.

LAW FIRM NEWS—Former SEC enforcement attorney Jason Spitalnick joined Snell & Wilmer as a partner in the Litigation, Investigations & Trials Practice Group, based in Denver. He focuses his practice on securities enforcement defense, white collar defense, internal investigations, and commercial litigation. Spitalnick most recently served as Enforcement Counsel at the SEC. Previously he acted as a litigation partner at Foster Graham Milstein & Calisher.

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