The Securities and Exchange Commission (the “SEC”) and Bitqyck, Inc. and its founders, Bruce E. Bise and Samuel J. Mendez (collectively the “Defendants”) reached a $10.1 million dollar settlement following allegations that the Defendants violated various securities laws in selling investors unregistered digital tokens. (Andrew Ramonas, Bloomberg Law). The SEC’s complaint alleged the Defendants violated the antifraud provisions and the registration requirements of the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”) and also separately violated the Exchange Act in running an unregistered securities exchange. (SEC Complaint). The settlement resulted in Bitqyck agreeing to pay disgorgement, prejudgment interest, and a civil penalty amounting to approximately $8.4 million, with Bise and Mendez individually paying approximately $890,000 and $850,000, respectively. (Andrew Ramonas, Bloomberg Law). As part of the settlement agreement, Defendants neither admitted nor denied wrongdoing in response to the SEC’s allegations. (Id.).
Read MoreIn 2018, activist shareholder campaigns increased to a record high, with about 250 campaigns initiated over the year (up from about 210 campaigns initiated in 2017). (Gail Weinstein et al., Harvard LawSchool). Institutional investors – such as pension funds, insurance companies, endowments, banks, and hedge funds – have initiated public campaigns to attempt to influence companies and management. (Yuliya Ponomareva, Forbes). These institutional players typically own a greater percentage of companies relative to individual minority shareholders and have more leverage, capital, and incentive to pressure management to take certain actions. Such investors tend to focus on issues related to corporate governance, such as replacing management, dividend payouts, new board of director appointments and executive compensation; however, unlike previous cycles of shareholder activism, environmental and other social issues are also becoming common platforms.
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