The U.S. Securities and Exchange Commission obtained an emergency freeze of $27 million in trading profits involving the CEO of cryptocurrency company Longfin and three other people, the agency said in a statement Friday.
Longfin’s stock was halted on the Nasdaq as of 10:01 a.m. ET on the SEC alert after jumping more than 47 percent. Shares had been halted numerous times throughout the week for volatility. The stock was worth more than $3 billion at one point in December after the company announced a cryptocurrency-related acquisition.
“We acted quickly to prevent more than $27 million in alleged illicit trading profits from being transferred out of the country,” Robert Cohen, chief of the SEC Enforcement Division’s Cyber Unit said in the statement. “Preventing defendants from transferring this money offshore will ensure that these funds remain available as the case continues.”
The SEC claims Longfin CEO and Chairman Venkat Meenavalli had the company issue unregistered shares to the three people so they could sell them, which they did.
The financial watchdog does allow people to own a certain amount of unregistered shares without having to go through what one lawyer calls a “very long” registration process. But those shares are restricted and cannot be sold during certain time periods.
SEC (Securities and Exchange Commission) lawyers specialize in navigating the complex regulatory landscape of securities law in the United States. These legal professionals play a crucial role in ensuring that companies comply with federal securities regulations, which are designed to protect investors and maintain the integrity of financial markets.
An SEC lawyer’s responsibilities include advising clients on matters related to securities offerings, mergers and acquisitions, corporate governance, and compliance with SEC rules. They also represent clients in investigations and enforcement actions brought by the SEC, where they defend against allegations of securities fraud, insider trading, and other violations.
Due to the high stakes involved, SEC lawyers must possess a deep understanding of financial regulations, as well as the ability to analyze and interpret complex legal documents. They often work with corporations, financial institutions, investment advisers, and public companies to ensure that all transactions and disclosures are in line with SEC requirements.
In addition to their advisory role, SEC lawyers are also involved in litigation, representing clients in court or in administrative proceedings. Their expertise is critical in helping businesses avoid costly penalties and reputational damage, making them indispensable in the financial and corporate sectors.