These are some of the compliance-related stories that recently caught my attention.
The Bizarre Case of Snowden and a Get-Rich-Quick Real Estate Investing Conference
Jack Poulson
Vice.com
Edward Snowden joined an online “elite real estate investment club” Saturday afternoon, spoke for several minutes about whistleblowing, called out one of the hosts for allegedly running a Ponzi scheme, then logged out in one of the more bizarre online conferences in recent memory.
https://www.vice.com/en/article/epndnz/the-bizarre-case-of-snowden-and-a-get-rich-quick-real-estate-investing-conference
Bitcoin, We Have a Problem
Matt Kelly
Radical Compliance
To be clear, Tesla made no inaccurate financial statements with this maneuver. But it did play fast and loose with a highly volatile asset (bitcoin) that gave the company a nice boost to the bottom line. Cynics would say Tesla came close to earnings management: it could see the value of bitcoin appreciating, and knew how much the company could sell to make up for any shortfalls that might exist on the operating side.
Even if the price of bitcoin fell, Tesla still could have dumped the asset, and then booked the loss for a credit on tax liability. Heads it wins one way; tails it wins another.
https://www.radicalcompliance.com/2021/04/27/bitcoin-we-have-a-problem/
FinCEN Commences Rulemaking Process for Implementation of Corporate Transparency Act Requiring Disclosure of Beneficial Ownership Information
Schulte Roth & Zabel LLP
On April 5, 2021, the Financial Crimes Enforcement Network, a bureau of the United States Department of the Treasury (“FinCEN” and “Treasury,” respectively) issued an advance notice of proposed rulemaking (“ANPRM”) beginning the process of implementing regulations under the Corporate Transparency Act (“CTA”). Enacted by Congress on Dec. 31, 2020, as part of the National Defense Authorization Act, the CTA requires certain companies created or registered to do business in the United States (each, a “Reporting Company”) to report certain identifying information, such as beneficial owners of 25% or more and certain control persons, directly to FinCEN. That information is to be held in a non-public database maintained by FinCEN and will be shared with law enforcement and federal regulators, among others. The reporting obligations discussed herein will only take effect upon the promulgation of final regulations by FinCEN, which FinCEN is required to issue by Jan. 1, 2022. The ANPRM is the first step in this rulemaking process and requests public comment on numerous questions relevant to the implementation of the CTA. Comments are due May 5, 2021.
https://www.srz.com/resources/fincen-commences-rulemaking-process-for-implementation-of.html
A rising actor, fake HBO deals and one of Hollywood’s most audacious Ponzi schemes
Michael Finnegan
Los Angeles Times
“This is the goose that lays the golden egg guys, lets just hope they keep coming month after month,” Yeghnazary wrote, suggesting they “ride this baby out as long as we can.” He brushed off Russell’s annoyance at Horwitz for refusing to let them see his business records.
https://www.latimes.com/california/story/2021-04-23/zachary-horwitz-hollywood-film-ponzi-scheme
New SEC Enforcement Director Alex Oh Resigns, Agency Says
Dave Michaels
Wall Street Journal
The new enforcement chief for the Securities and Exchange Commission resigned after just a few days on the job, the agency said Wednesday, following a judge’s questioning of her conduct in a lawsuit involving Exxon Mobil Corp.
https://www.wsj.com/articles/new-sec-enforcement-director-alex-oh-resigns-agency-says-11619644474