The Florida state financial watchdog brought charges against Bittrex Inc. before the exchange filed for bankruptcy protection in May, a new filing has revealed, CoinGeek.com reported. The Florida Office of Financial Regulation (OFR) recently revealed that it issued a complaint to Bittrex on April 17, the same day the U.S. Securities and Exchange Commission (SEC) charged the exchange with operating an unregistered securities trading platform. Bittrex would surrender its Florida license two weeks later and, on May 8, filed for bankruptcy protection. Bittrex Inc. operated in the U.S. and was based in Seattle, with Bittrex Global overseeing operations outside the United States. OFR accused Bittrex of failing to segregate customer funds, failing to always maintain a surety bond in the correct amount, and a third charge which was redacted from the public court filings.
The Republican-led U.S. House of Representatives Oversight Committee on Monday asked Federal Reserve Chair Jerome Powell to hand over confidential documents related to the central bank's supervision of failed Silicon Valley Bank, Reuters reported. Committee chair James Comer, in a letter to Powell published on the panel's website, also asked for documents related to Fed Vice Chair Michael Barr's investigation into the supervisory and regulatory failures that contributed to SVB's collapse in March, which triggered weeks of turmoil in the U.S. and global banking industry. Fed staff, the letter said, had so far only turned over already public information, but nothing that was "responsive" to the committee's specific requests as it investigates the SVB failure. "On June 1, 2023, Committee staff met with the Fed Board staff to discuss the Committee’s concerns with the assertion of a blanket privilege over all the documents we requested and ensure the Committee would receive the documents necessary to a full and complete investigation," the letter said. "During that meeting, Fed Board staff agreed to turn over non-public CSI (confidential supervisory information) materials and other responsive documents," it said. Among documents requested were all interviews and notes related to Barr's report.
Johnson & Johnson wrapped up a trial today to determine if the health care giant is misusing the bankruptcy system for the second time in less than two years in a bid to force an end to about 40,000 cancer lawsuits, Bloomberg News reported. A bankrupt unit of J&J has been in federal court this week fighting a group of cancer victims who want juries around the country to decide whether their diseases were caused by tainted talc in baby powder the company sold for years. J&J is using the unit’s chapter 11 case to try to force holdouts to accept an $8.9 billion settlement offer. In the coming weeks, Bankruptcy Judge Michael Kaplan, who is based about 25 miles from J&J’s headquarters, must decide whether to throw out the bankruptcy of LTL Management, a unit created to try to end all current and future health claims related to the talc. Earlier this year, a federal appeals court ordered Kaplan to dismiss the first LTL bankruptcy. Judge Kaplan did not say when he would rule on the new bankruptcy case, but told lawyers they can submit a final round of written arguments in July. Since J&J first put LTL into bankruptcy in 2021, victims have been blocked from taking their cancer claims to trial. The bankruptcy strategy was developed after J&J lost some big trials, including one verdict in which the company was forced to pay out $2.5 billion to about 20 women.
The lead negotiators for Johnson & Johnson's proposed $8.9 billion settlement of thousands of talc lawsuits faced intense questioning in U.S. bankruptcy court on Wednesday about how much support the company has for the deal, Reuters reported. During a multi-day court hearing in Trenton, New Jersey, attorneys for plaintiffs alleging that J&J's baby powder and other talc products sometimes contained asbestos and caused ovarian cancer and mesothelioma drilled down on J&J's public statements that it has "secured commitments from over 60,000 current claimants" for the settlement, and that the "majority" of talc claimants support it. The deal has divided lawyers representing cancer victims, many of whom claim that J&J has created the illusion of widespread support for a settlement that would deny plaintiffs just compensation. Johnson & Johnson is attempting to use the second bankruptcy of its subsidiary LTL Management to resolve all current and future claims stemming from its talc products. LTL's first attempt to do that was dismissed in April after a U.S. appeals court ruled that it was not in sufficient financial distress to be eligible for bankruptcy protection. LTL quickly filed for bankruptcy again, arguing that its second effort has won more support from plaintiffs.
FTX is moving ahead with efforts to revive its flagship international cryptocurrency exchange, even while its reputation continues to take a hit as new managers shed light on how they say nearly $9 billion in customer funds were stolen before the company’s collapse last year, WSJ Pro Bankruptcy reported. The company “has begun the process of soliciting interested parties to the reboot of the FTX.com exchange,” said Chief Executive John J. Ray III, who took over in November when it filed for bankruptcy. The failed crypto company has been holding early talks with investors about backing a potential restart of the FTX.com exchange through structures including a joint venture, people familiar with the discussions said. FTX would likely rebrand as part of any restart, these people said. The talks include possible compensation for certain existing customers, possibly by offering them stakes in any reorganized entity, the people said. Blockchain technology company Figure has indicated its interest in helping back a restart of FTX, people familiar with the matter said. Figure was part of an investment group that bid for the rights to restart Celsius Network, another bankrupt crypto business, but lost out to a consortium backed by Fortress Investment Group. Read more.
In related news, bankrupt cryptocurrency exchange FTX sued one of its former top lawyers, accusing him of aiding fraud by company founder Sam Bankman-Fried and silencing whistleblowers who reported wrongdoing at the company, Reuters reported. The complaint, filed on Tuesday in U.S. Bankruptcy Court in Delaware, describes Daniel Friedberg, a former chief compliance officer at FTX and general counsel of its related crypto hedge fund Alameda Research, as a "fixer" for Bankman-Fried and other FTX executives who enabled the "wholesale raiding" of customer funds. Friedberg “whitewashed” complaints from employees raising concerns about the activities of FTX and Alameda by settling claims for “inflated” amounts and in some cases hiring law firms that represented whistleblowers to perform legal work for FTX, the company said. The settlement amounts are redacted in the complaint. Read more.
PG&E has applied for a roughly $7 billion dollar federal loan to fund its ambitious plans to reduce California wildfire risk by burying power lines and upgrading the electric grid, company executives said, the Wall Street Journal reported. The California utility was invited to apply for funding from the Energy Department’s Loan Programs Office, which finances critical energy projects tied to the shift away from fossil fuels. If approved, that amount would rank among the largest-ever loans for the office. It recently committed a record $9.2 billion to a Ford Motor joint venture making electric-car batteries. A General Motors battery venture struck a deal with the office last year for a $2.5 billion loan. PG&E hopes to use the loan to help fund the burial of 10,000 miles of power lines in regions at high risk of fire, Chief Executive Patti Poppe said in an interview. Other potential uses include replacing overloaded transmission conductors that carry power and upgrading substations. Last year’s climate law increased the loan office’s lending capacity roughly 10-fold to about $400 billion and created a new category of loans for upgrading energy infrastructure. The funding would be a boon for Oakland, Calif.-based PG&E, which faces challenges raising money from Wall Street after a complex bankruptcy restructuring. The company is preparing for a surge in electricity demand driven by the state’s shift to electric vehicles.
The Supreme Court upheld a Pennsylvania law on Tuesday that requires corporations to consent to being sued in its courts — by anyone, for conduct anywhere — as a condition for doing business in the state, the New York Times reported. Only Pennsylvania has such a law. But the ruling may pave the way for other states to enact similar ones, giving injured consumers, workers and others more choices of where to sue and subjecting corporations to suits in courts they may view as hostile to business. The Supreme Court was split 5 to 4, with Justice Neil M. Gorsuch writing for the majority. In ruling against the corporation at the center of the case, Norfolk Southern, Justice Gorsuch rejected its argument that it was entitled “to a more favorable rule, one shielding it from suits even its employees must answer” under the Fourteenth Amendment. In dissent, Justice Amy Coney Barrett, joined by Chief Justice John G. Roberts Jr. and Justices Elena Kagan and Brett M. Kavanaugh, wrote that Pennsylvania’s law unfairly harmed other states’ rights because it imposed “a blanket claim of authority over controversies with no connection to the commonwealth.” The case was brought by Robert Mallory, who said he developed cancer after being exposed to toxic chemicals during his nearly two decades as a freight car mechanic in Virginia and Ohio for Norfolk Southern Railway, which was incorporated in Virginia and, at the time, was based there. Mallory contended that his job entailed spraying boxcar pipes with asbestos and demolishing car interiors that, he claims, contained carcinogens. The question in the case was whether he could sue in a third state with no concrete connection to the suit: Pennsylvania. The decision came after the derailment of a Norfolk Southern train carrying toxic chemicals near the Pennsylvania state line, which amplified the stakes of the case. A fire ensued and led to fears of an explosion, prompting the authorities to burn off some of the train’s hazardous cargo and raising worries about harms to public health and the environment.
A federal judge on Tuesday rejected Sam Bankman-Fried's bid to throw out most of the U.S. government's criminal case accusing the FTX cryptocurrency exchange founder of orchestrating a multibillion-dollar fraud, Reuters reported. The decision by U.S. District Judge Lewis Kaplan in Manhattan paves the way for an Oct. 2 trial of Bankman-Fried, a 31-year-old former billionaire. Prosecutors accused Bankman-Fried of stealing billions of dollars in FTX customer funds to plug losses at his Alameda Research hedge fund. They also accused Bankman-Fried of misleading investors and lenders, and contributing illegally to U.S. political campaigns in the names of colleagues. Bankman-Fried has pleaded not guilty and denied stealing funds, while acknowledging that FTX had inadequate risk management.
Liquidators at bankrupt cryptocurrency hedge fund Three Arrows Capital are seeking to recover $1.3 billion from the co-founders, a person familiar with the matter told Reuters on Tuesday, an amount that reflects losses they allegedly racked up before the firm collapsed last year, Reuters reported. The liquidators discussed the allegations against Three Arrows co-founders Su Zhu and Kyle Davies at a Tuesday meeting with the hedge fund's creditors, the person said. Zhu and Davies are accused of causing Three Arrows to take on significant leverage between May and June 2022 after the hedge fund suffered big losses on Luna tokens and other investments, the person said. The firm was already insolvent, liquidators contend, and they are now taking action against Zhu and Davies in a British Virgin Islands court to recover those losses for the creditors, the person added.
