Gary DeWaal
New York
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Articles by Gary DeWaal
Court Denies SEC’s Request for Disgorgement in Ripple Case | JD Supra
In a setback to the Securities and Exchange Commission’s (SEC) crypto enforcement efforts, a federal court has denied the agency’s request for disgorgement of profits in its case against Ripple Labs. The ruling, issued by Judge Analisa Torres of the US District Court for the Southern District of New York on August 7, deals a blow to the SEC’s strategy of seeking large disgorgement penalties in cases based solely on registration violations.
Court Denies SEC's Request For Disgorgement In Ripple Case
In a setback to the Securities and Exchange Commission's (SEC) crypto enforcement efforts, a federal court has denied the agency's request for disgorgement of profits in its case against Ripple Labs. The ruling, issued by Judge Analisa Torres of the US District Court for the Southern District of New York on August 7, deals a blow to the SEC's strategy of seeking large disgorgement penalties in cases based solely on registration violations.
Court Denies SEC’s Request for Disgorgement in Ripple Case
In a setback to the Securities and Exchange Commission’s (SEC) crypto enforcement efforts, a federal court has denied the agency’s request for disgorgement of profits in its case against Ripple Labs. The ruling, issued by Judge Analisa Torres of the US District Court for the Southern District of New York on August 7, deals a blow to the SEC’s strategy of seeking large disgorgement penalties in cases based solely on registration violations.
Artists Sue SEC, Challenging Agency’s Authority Over Digital Art and NFTs | JD Supra
Two artists have filed a lawsuit against the Securities and Exchange Commission (SEC), contesting the agency’s assertion of authority over non-fungible tokens (NFTs). Jonathan Mann, a musician renowned for his daily songwriting, and Brian L. Frye, a conceptual artist and law professor, are seeking declaratory judgments that their planned NFT projects do not constitute securities offerings.
Artists Sue SEC, Challenging Agency's Authority Over Digital Art And NFTs
Two artists have filed a lawsuit against the Securities and Exchange Commission (SEC), contesting the agency's assertion of authority over non-fungible tokens (NFTs). Jonathan Mann, a musician renowned for his daily songwriting, and Brian L. Frye, a conceptual artist and law professor, are seeking declaratory judgments that their planned NFT projects do not constitute securities offerings.
Financial Markets and Funds Quick Take | Issue 29
Katten's Financial Markets and Funds Quick Take is a monthly newsletter highlighting key noteworthy developments potentially affecting financial markets and funds. To read more issues of Katten's Financial Markets and Funds Quick Take, please click here.
Ether’s Legal Status Clarified? CFTC Scores Win as Court Backs Agency’s Commodity Classification | JD Supra
In a victory for the Commodity Futures Trading Commission (CFTC), a federal court has granted summary judgment in favor of the agency in its case against Sam Ikkurty and his company Ikkurty Capital LLC. The ruling, issued by Judge Mary M. Rowland of the US District Court for the Northern District of Illinois on July 1, 2024, affirms the CFTC’s broad authority to combat fraud in cryptocurrency markets and explicitly declares Ether to be a commodity subject to CFTC oversight.
Ether's Legal Status Clarified? CFTC Scores Win As Court Backs Agency's Commodity Classification
In a victory for the Commodity Futures Trading Commission (CFTC), a federal court has granted summary judgment in favor of the agency in its case against Sam Ikkurty and his company Ikkurty Capital LLC. The ruling, issued by Judge Mary M. Rowland of the US District Court for the Northern District of Illinois on July 1, 2024, affirms the CFTC's broad authority to combat fraud in cryptocurrency markets and explicitly declares Ether to be a commodity subject to CFTC oversight.
SEC Targets Crypto Infrastructure Provider: Consensys Charged With Operating Unregistered Broker And Selling Unregistered Securities
In a significant escalation of its crypto enforcement efforts, the Securities and Exchange Commission (SEC) has filed charges against Consensys Software Inc., the developer of the popular MetaMask crypto wallet and suite of services. The complaint, filed on June 28, alleges that Consensys has operated and continues to operate as an unregistered broker and has engaged and continues to engage in the unregistered offer and sale of securities through two MetaMask staking programs.
SEC Targets Crypto Infrastructure Provider: Consensys Charged with Operating Unregistered Broker and Selling Unregistered Securities | JD Supra
In a significant escalation of its crypto enforcement efforts, the Securities and Exchange Commission (SEC) has filed charges against Consensys Software Inc., the developer of the popular MetaMask crypto wallet and suite of services. The complaint, filed on June 28, alleges that Consensys has operated and continues to operate as an unregistered broker and has engaged and continues to engage in the unregistered offer and sale of securities through two MetaMask staking programs.
Financial Markets And Funds Quick Take
By Farzad Damania, Ryan Lilley On April 4, the SEC issued an order staying the implementation of the recently finalized climate disclosure rules (Final Rules) in response to the consolidated legal challenges in the US Court of Appeals for the Eighth Circuit.
Financial Markets and Funds Quick Take | Issue 25
Katten's Financial Markets and Funds Quick Take is a monthly newsletter highlighting key noteworthy developments potentially affecting financial markets and funds. To read more issues of Katten's Financial Markets and Funds Quick Take, please click here.
Ether's Security Designation Creates Risk Of Market Disruption
A special purpose broker dealer, or SPBD, recently disclosed unilaterally that it would soon custody the digital asset ether, known as ETH, as a digital asset security. This move raises unknown legal consequences and profound confusion for industry participants and customers. The SPBD, licensed with the Securities and Exchange Commission, made the announcement although ETH is commonly regarded as a non-security by most of the crypto industry, including the Commodity Futures Trading Commission.
Ether’s Security Designation Creates Risk of Market Disruption
A special purpose broker dealer, or SPBD, recently disclosed unilaterally that it would soon custody the digital asset ether, known as ETH, as a digital asset security. This move raises unknown legal consequences and profound confusion for industry participants and customers. The SPBD, licensed with the Securities and Exchange Commission, made the announcement although ETH is commonly regarded as a non-security by most of the crypto industry, including the Commodity Futures Trading Commission.
The Lesson Of Prometheus – A Special Purpose Broker Dealer May Cause Havoc In TradFi By Unilaterally Declaring ETH To Be A Security - Commodities/Derivatives/Stock Exchanges - United States
As referenced in the opening scene of the 2023 Oscar-winning film Oppenheimer, Prometheus, the Greek god of forethought, is best known for stealing fire from the gods to give to humanity. As punishment, Zeus had Prometheus bound to a rock and created Pandora's box, which eventually released suffering and despair upon humankind.1 Prometheus serves as a reminder of the risk of unintended consequences from well-meaning actions.
The Lesson of Prometheus – A Special Purpose Broker Dealer May Cause Havoc in TradFi by Unilaterally Declaring ETH To Be A Security | JD Supra
March 12, 2024 Robert Bourret, Daniel Davis, Gary DeWaal, Alexander Kim Katten Muchin Rosenman LLP + Follow x Following x Following - Unfollow Contact To embed, copy and paste the code into your website or blog: As referenced in the opening scene of the 2023 Oscar-winning film Oppenheimer, Prometheus, the Greek god of forethought, is best known for stealing fire from the gods to give to humanity.
The Lesson of Prometheus - A Special Purpose Broker Dealer May Cause Havoc in TradFi by Unilaterally Declaring ETH To Be A Security
As referenced in the opening scene of the 2023 Oscar-winning film Oppenheimer, Prometheus, the Greek god of forethought, is best known for stealing fire from the gods to give to humanity. As punishment, Zeus had Prometheus bound to a rock and created Pandora's box, which eventually released suffering and despair upon humankind.1 Prometheus serves as a reminder of the risk of unintended consequences from well-meaning actions.
SEC Significantly Broadens
Two new rules that significantly expand who may be required to register as a "dealer" or a "government securities dealer" were adopted by the Securities and Exchange Commission (SEC) on February 6, 2024.1 As a result of this significant expansion, many market participants previously considered "traders" will be considered "dealers" under the new rules and required to register with the SEC as broker-dealers.
Financial Markets And Funds Quick Take
Katten's Financial Markets and Funds Quick Take is a monthly newsletter highlighting key noteworthy developments potentially affecting financial markets and funds. To read more issues of Katten's Financial Markets and Funds Quick Take, please click here. By Susan Light FINRA filed a rule amendment with the Securities and Exchange Commission (SEC) on January 2 to propose amending FINRA Rule 3240, Borrowing From or Lending to Customers (SR-FINRA-2024-001).
Financial Markets and Funds Quick Take | Issue 22 | JD Supra
Katten's Financial Markets and Funds Quick Take is a monthly newsletter highlighting key noteworthy developments potentially affecting financial markets and funds. To read more issues of Katten's Financial Markets and Funds Quick Take, please click here. Neither a Borrower Nor a Lender Be! By Susan Light FINRA filed a rule amendment with the Securities and Exchange Commission (SEC) on January 2 to propose amending FINRA Rule 3240, Borrowing From or Lending to Customers (SR-FINRA-2024-001).
See Spot Run (Finally): After Over A Decade Of Rejections, SEC Approves 11 New Spot Bitcoin ETPs
Eleven spot bitcoin-based exchange-traded products (ETPs) were finally approved by the Securities and Exchange Commission (SEC) on January 10, 2024, after multiple such ETPs had been rejected by the SEC over the last ten years.
CFTC Settles Enforcement Action Against Commodity Trading Firm For Alleged Fraud In Connection With Physical Commodity Trading Only – No Derivatives - Commodities/Derivatives/Stock Exchanges - United States
Emphasizing its broad authority over fraud solely in connection with commodities – not just fraud in connection with derivatives referencing commodities – the Commodity Futures Trading Commission settled an enforcement action against Freepoint Commodities LLC on December 14, 2023, where it alleged that the firm illegally traded fuel oil based on non-public information obtained through "corrupt payments" in violation of an applicable provision of the Commodity Exchange Act (7 USC Sec.
Foreign Listed Stock Index Futures And Options Approvals December 2023
Attached please find the updated Foreign Listed Stock Index Futures and Options Approvals Chart, current as of December 19, 2023. All prior versions are superseded and should be discarded.
CFTC Settles Enforcement Action Against Commodity Trading Firm for Alleged Fraud in Connection with Physical Commodity Trading Only – No Derivatives | JD Supra
Emphasizing its broad authority over fraud solely in connection with commodities – not just fraud in connection with derivatives referencing commodities – the Commodity Futures Trading Commission settled an enforcement action against Freepoint Commodities LLC on December 14, 2023, where it alleged that the firm illegally traded fuel oil based on non-public information obtained through “corrupt payments” in violation of an applicable provision of the Commodity Exchange Act (7 USC Sec.
Foreign Listed Stock Index Futures and Options Approvals December 2023 | JD Supra
Attached please find the updated Foreign Listed Stock Index Futures and Options Approvals Chart, current as of December 19, 2023. All prior versions are superseded and should be discarded.
CFTC Settles Enforcement Action Against Commodity Trading Firm for Alleged Fraud in Connection with Physical Commodity Trading Only - No Derivatives
Emphasizing its broad authority over fraud solely in connection with commodities – not just fraud in connection with derivatives referencing commodities – the Commodity Futures Trading Commission settled an enforcement action against Freepoint Commodities LLC on December 14, 2023, where it alleged that the firm illegally traded fuel oil based on non-public information obtained through “corrupt payments” in violation of an applicable provision of the Commodity Exchange Act (7 USC Sec.
CFTC Settles Enforcement Action Against Commodity Trading Firm for Alleged Fraud in Connection with Physical Commodity Trading Only – No Derivatives (via Passle)
Emphasizing its broad authority over fraud solely in connection with commodities – not just fraud in connection with derivatives referencing commodities – the Commodity Futures Trading Commission settled an enforcement action against Freepoint Commodities LLC on December 14, 2023, where it alleged that the firm illegally traded fuel oil based on non-public information obtained through “corrupt payments” in violation of an applicable provision of the Commodity Exchange Act (7 USC Sec.
Financial Markets and Funds Quick Take | Issue 22
Katten's Financial Markets and Funds Quick Take is a monthly newsletter highlighting key noteworthy developments potentially affecting financial markets and funds. To read more issues of Katten's Financial Markets and Funds Quick Take, please click here. Neither a Borrower Nor a Lender Be! By Susan Light FINRA filed a rule amendment with the Securities and Exchange Commission (SEC) on January 2 to propose amending FINRA Rule 3240, Borrowing From or Lending to Customers (SR-FINRA-2024-001).
Financial Markets And Funds Quick Take
Katten's Financial Markets and Funds Quick Take is a monthly newsletter highlighting key noteworthy developments potentially affecting financial markets and funds. To read more issues of Katten's Financial Markets and Funds Quick Take, please click here. By Adam Bolter On October 16, the Securities and Exchange Commission's (SEC) Division of Examinations (Division) published its examination priorities for its fiscal year 2024, noting there will be a greater presence of examiners in the field.
Financial Markets and Funds Quick Take | Issue 20 | JD Supra
Katten's Financial Markets and Funds Quick Take is a monthly newsletter highlighting key noteworthy developments potentially affecting financial markets and funds. To read more issues of Katten's Financial Markets and Funds Quick Take, please click here.
Financial Markets and Funds Quick Take | Issue 20
Katten's Financial Markets and Funds Quick Take is a monthly newsletter highlighting key noteworthy developments potentially affecting financial markets and funds. To read more issues of Katten's Financial Markets and Funds Quick Take, please click here.
Back To The Future: CFTC Proposes To Amend Customer Funds Investment Rule Including To Again Permit Investments In Certain Non-US Sovereign Debt
The Commodity Futures Trading Commission (CFTC) has proposed to lessen a blanket restriction on the investment of customer funds in all non-United States sovereign debt instruments that was imposed on future commission merchants (FCMs) and derivative clearing organizations (DCOs) following the dramatic collapse of MF Global in October 2011, in a newly issued Notice of Proposed Rulemaking (NPRM).
CFTC Proposes to Amend Customer Funds Investment Rule Including to Again Permit Investments in Certain Non-US Sovereign Debt | JD Supra
The Commodity Futures Trading Commission (CFTC) has proposed to lessen a blanket restriction on the investment of customer funds in all non-United States sovereign debt instruments that was imposed on future commission merchants (FCMs) and derivative clearing organizations (DCOs) following the dramatic collapse of MF Global in October 2011, in a newly issued Notice of Proposed Rulemaking (NPRM).
Back to the Future: CFTC Proposes to Amend Customer Funds Investment Rule Including to Again Permit Investments in Certain Non-US Sovereign Debt (via Passle)
The Commodity Futures Trading Commission (CFTC) has proposed to lessen a blanket restriction on the investment of customer funds in all non-United States sovereign debt instruments that was imposed on future commission merchants (FCMs) and derivative clearing organizations (DCOs) following the dramatic collapse of MF Global in October 2011, in a newly issued Notice of Proposed Rulemaking (NPRM).
Back to the Future: CFTC Proposes to Amend Customer Funds Investment Rule Including to Again Permit Investments in Certain Non-US Sovereign Debt
The Commodity Futures Trading Commission (CFTC) has proposed to lessen a blanket restriction on the investment of customer funds in all non-United States sovereign debt instruments that was imposed on future commission merchants (FCMs) and derivative clearing organizations (DCOs) following the dramatic collapse of MF Global in October 2011, in a newly issued Notice of Proposed Rulemaking (NPRM).
New CFTC Enforcement Advisory on Penalties, Monitors and Admissions Portends Increased Compliance Costs for Industry | JD Supra
It is no longer just lions, tigers and bears Dorothy needs to be fearful of, but if she is a potential defendant in a CFTC enforcement action; she must also now worry about potential higher fines (especially if she is recidivist), imposition of third-party monitors, and mandatory admissions of facts and/or violations of law to obtain a settlement under a CFTC Division of Enforcement (DOE) Advisory issued on October 17, 2023.
Tread With Caution: New CFTC Enforcement Advisory On Penalties, Monitors And Admissions Portends Increased Compliance Costs For Industry
It is no longer just lions, tigers and bears Dorothy needs to be fearful of, but if she is a potential defendant in a CFTC enforcement action, she must also now worry about potential higher fines (especially if she is recidivist), imposition of third-party monitors, and mandatory admissions of facts and/or violations of law to obtain a settlement under a CFTC Division of Enforcement (DOE) Advisory issued on October 17, 2023.
CFTC Resuscitates Version of MLB’s Former 'Neighborhood Play' to Sue Principal of Defunct Crypto-Asset Entity Voyager as a Commodity Pool Operator | JD Supra
'The Commodity Futures Trading Commission appears to have revived a version of Major League Baseball’s “neighborhood play,” as evidenced by its allegations in a recently filed enforcement action, CFTC v. Stephen Ehrlich. There, the CFTC claimed that Voyager Digital Ltd.
CFTC Resuscitates Version Of MLB's Former 'Neighborhood Play' To Sue Principal Of Defunct Crypto-Asset Entity Voyager As A Commodity Pool Operator
'The Commodity Futures Trading Commission appears to have revived a version of Major League Baseball's "neighborhood play," as evidenced by its allegations in a recently filed enforcement action, CFTC v. Stephen Ehrlich. There, the CFTC claimed that Voyager Digital Ltd.
CFTC Resuscitates Version of MLB’s Former 'Neighborhood Play' to Sue Principal of Defunct Crypto-Asset Entity Voyager as a Commodity Pool Operator (via Passle)
'The Commodity Futures Trading Commission appears to have revived a version of Major League Baseball’s “neighborhood play,” as evidenced by its allegations in a recently filed enforcement action, CFTC v. Stephen Ehrlich. There, the CFTC claimed that Voyager Digital Ltd.
CFTC Resuscitates Version of MLB’s Former 'Neighborhood Play' to Sue Principal of Defunct Crypto-Asset Entity Voyager as a Commodity Pool Operator
'The Commodity Futures Trading Commission appears to have revived a version of Major League Baseball’s “neighborhood play,” as evidenced by its allegations in a recently filed enforcement action, CFTC v. Stephen Ehrlich. There, the CFTC claimed that Voyager Digital Ltd.
SEC’s Request for Interlocutory Appeal of Favorable Rulings for Ripple Labs’ Defendants Rejected Based on Well-Settled Law | JD Supra
On October 3, 2023, a federal court denied the Securities and Exchange Commission’s request to certify for appeal the same court’s decision (Initial Decision) granting Ripple Labs, Inc.’s and two principals’ motion for summary judgment that certain types of sales and distributions of the digital asset XRP did not constitute investment contracts.
SEC's Request For Interlocutory Appeal Of Favorable Rulings For Ripple Labs' Defendants Rejected Based On Well-Settled Law
On October 3, 2023, a federal court denied the Securities and Exchange Commission's request to certify for appeal the same court's decision (Initial Decision) granting Ripple Labs, Inc.'s and two principals' motion for summary judgment that certain types of sales and distributions of the digital asset XRP did not constitute investment contracts.
SEC’s Request for Interlocutory Appeal of Favorable Rulings for Ripple Labs’ Defendants Rejected Based on Well-Settled Law (via Passle)
On October 3, 2023, a federal court denied the Securities and Exchange Commission’s request to certify for appeal the same court’s decision (Initial Decision) granting Ripple Labs, Inc.’s and two principals’ motion for summary judgment that certain types of sales and distributions of the digital asset XRP did not constitute investment contracts.
US Court Holds DeFi Developer Cannot Be Held Liable for 3d Party Bad Actors; A Week Later, CFTC Suggests Contrary View Over One Commissioner’s Dissent | Katten Muchin Rosenman LLP - JDSupra
A developer and financial backers of a renowned decentralized finance protocol cannot be held liable to private litigants for the activities of unrelated bad actors that utilized the protocol to launch and offer for sale scam digital assets, ruled a federal district court judge in New York City on August 29, 2023.
US Court Holds DeFi Developer Cannot Be Held Liable For 3d Party Bad Actors; A Week Later, CFTC Suggests Contrary View Over One Commissioner's Dissent - Commodities/Derivatives/Stock Exchanges - United States
A developer and financial backers of a renowned decentralized finance protocol cannot be held liable to private litigants for the activities of unrelated bad actors that utilized the protocol to launch and offer for sale scam digital assets, ruled a federal district court judge in New York City on August 29, 2023.
US Court Holds DeFi Developer Cannot Be Held Liable for 3d Party Bad Actors; A Week Later, CFTC Suggests Contrary View Over One Commissioner’s Dissent
A developer and financial backers of a renowned decentralized finance protocol cannot be held liable to private litigants for the activities of unrelated bad actors that utilized the protocol to launch and offer for sale scam digital assets, ruled a federal district court judge in New York City on August 29, 2023.
SEC Denial of Grayscale Bitcoin Fund Was Arbitrary and Capricious Rules DC Circuit Court of Appeals | JD Supra
The Securities and Exchange Commission acted arbitrarily and capriciously when it denied Grayscale Investment LLC’s proposed listing of a bitcoin exchange traded fund (ETP) in July 2022, ruled a unanimous three judge panel of the United States Court of Appeals for the District of Columbia Circuit on August 29, 2023. Grayscale’s ETP was intended to be traded on NYSE Arca, a national securities exchange.
SEC Denial Of Grayscale Bitcoin Fund Was Arbitrary And Capricious Rules DC Circuit Court Of Appeals
The Securities and Exchange Commission acted arbitrarily and capriciously when it denied Grayscale Investment LLC's proposed listing of a bitcoin exchange traded fund (ETP) in July 2022, ruled a unanimous three judge panel of the United States Court of Appeals for the District of Columbia Circuit on August 29, 2023. Grayscale's ETP was intended to be traded on NYSE Arca, a national securities exchange.
Offering of NFTs Allegedly Promoted as Investments Claimed To Be Unregistered Securities Offering by SEC in Settled Enforcement Action | JD Supra
An offering of non-fungible tokens was deemed an unlawful offering of securities without registration by the Securities and Exchange Commission in a novel Order of first impression accepting a settlement of proposed charges against Impact Theory, LLC on August 28, 2023. According to the SEC, from October through December 2021, Impact Theory offered and sold three tiers of NFTs it termed “Founder’s Keys” to the public.
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