These are some compliance stories that recently caught my attention.
Coinbase earnings were bad. Worse still, the crypto exchange is now warning that bankruptcy could wipe out user funds
By Nicholas Gordon
Coinbase said in its earnings report Tuesday that it holds $256 billion in both fiat currencies and cryptocurrencies on behalf of its customers. Yet the exchange noted that in the event it ever declared bankruptcy, “the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings.” Coinbase users would become “general unsecured creditors,” meaning they have no right to claim any specific property from the exchange in proceedings. Their funds would become inaccessible.
Elon Musk’s Belated Disclosure of Twitter Stake Triggers Regulators’ Probes
By Dave Michaels
The Securities and Exchange Commission is probing Mr. Musk’s tardy submission of a public form that investors must file when they buy more than 5% of a company’s shares, the people said. The disclosure functions as an early sign to shareholders and companies that a significant investor could seek to control or influence a company.
The Tesla Inc. chief executive made his filing on April 4, at least 10 days after his stake surpassed the trigger point for disclosure. Mr. Musk hasn’t publicly explained why he didn’t file in a timely manner.
Federal Reserve Board issues enforcement action with former employee of Deutsche Bank
Romero altered the proposed annual base salary in an offer letter he received from a competing financial institution, and provided that offer letter containing the altered salary to the Bank in an effort to increase his annual base salary; …
[T]he Bank in December 2018 matched the altered salary from the competing financial institution and increased Romero’s annual base salary by approximately $28,000….
Utah-based Lions Not Sheep is an apparel company that sells t-shirts, sweatshirts, jackets, and sweaters on their own website as well as through Amazon and Etsy. The company and its owner Whalen heavily marketed it through social media channels, claiming that it would “show people it’s possible to live your life as a LION, Not a sheep.” Their Made in USA claims online and on product labels included “Made in the USA,” “Made in America,” “Are your products USA Made?” “100% AMERICAN MADE,” and “BEST DAMN AMERICAN MADE GEAR ON THE PLANET.” In most cases, the products advertised using these claims consist of wholly imported shirts and hats with limited finishing work performed in the United States.