#securities law

[lawbyrhys]

The CrowdStrike Outage Impact on Law Firms

In case you weren't aware, late last night into early this morning, CrowdStrike, a cybersecurity firm, sent out an update to Microsoft software which led to a global outage due to patch issues within their Falcon virus scanner platform. Many law firms around the world employ this software, with the relationship only growing since the partnership with Factor to assist in higher-stakes transactional legal work.

How did the outage actually impact the legal world at large, though? Let's break it down.

Lawyers and law firms were generally unaffected beyoind small-scale inconvenience—at least in the United States. For example, the New York Unified Court System was impacted, as were law publications like Law.com. As stated above, most law firms, courts, and tribunals nationwide were minority impacted or felt no impact whatsoever, as is the case with the Bar Council and sets of chambers. The extent of damages otherwise was limited to temporary disruption to operation, website glitches, and indirect impact on suppliers. UK law firms, though, experienced the bulk of the chaos as it concerns bank communications and payment transfer issues, particularly with staff who aren't member-facing. These issues also appear to have been mostly resolved quickly.

Internationally, impacted firms are using the outage as an opportunity to affirm contingency plans, and similar business continuing policies are in place, as well as

Alex Brown, the head of digital business for international law firm Simmons & Simmons, wrote the following on his LinkedIn: “As we rely more on digital infrastructure, ensuring robust and resilient systems is becoming paramount for companies and society. This event will likely draw increased regulatory and government attention to safeguarding our digital operations.”

It's obvious the outage has had a massively felt impact, but will anybody face consequences?

CloudStrike Holdings, Inc. could face related legal ramifications, as Pomerantz LLP is investigating whether various employees at CrowdStrike were engaged in illegal business practices, such as securities fraud, on behalf of CrowdStrike's investors and interested parties.

Needless to say, it's a technological shit show.

While this post is about the impacts on the legal world, CrowdStrike did release a statement on the situation that I will share here.

“We’re deeply sorry for the impact that we’ve caused to customers, travellers, and anyone affected by this, including our companies." - CrowdStrike CEO George Kurtz via NBC reports.

Was anybody impacted by the CrowdStrike Windows outage last night? Personally, I was not. I was working late and was on a midnight call with a client when I heard about it, but since I was using my work iPhone and wasn't actively accessing any systems at the time; I only found out last night from a friend of mine who works bank security on the East Coast. That said, though, when I walked into work this morning, conversation was ablaze on the topic; although none of us reall had any tangible harm done, it was still an interesting discussion over our morning coffee.

What about you, though? Were you affected?

[nationallawreview]

SEC Enforcement Director Highlights Increased Penalties for Violations of Whistleblower Rule

Recently, the U.S. Securities and Exchange Commission (SEC) has increased enforcement efforts around the whistleblower protection rule Rule 21F-17(a) which prohibits companies from impeding the ability of individuals to blow the whistle on potential securities law violations to the Commission. Most notably, the rule prohibits overly broad non-disclosure agreements and other employment agreements…

[chloesimaginationthings]

FNAF nightmare foxy is a huge fan of Roxanne Wolf,,

[transrevolutions]

for gods sake please if you were involved in a riot or a violent protest or any kind of illegal direct action do NOT post about it on tumblr! especially not with pictures! you are putting yourself and your comrades at risk! if you intend to discuss your experience for the purpose of educating others, be as vague as possible about where you were and what the situation was. again, NO PICTURES!

[svdaily]

[mabbbish]

wonderful day to remember ninjago has a canon highschool au

[mostlysignssomeportents]

How to shatter the class solidarity of the ruling class

I'm touring my new, nationally bestselling novel The Bezzle! Catch me WEDNESDAY (Apr 11) at UCLA, then Chicago (Apr 17), Torino (Apr 21) Marin County (Apr 27), Winnipeg (May 2), Calgary (May 3), Vancouver (May 4), and beyond!

Audre Lorde counsels us that "The Master's Tools Will Never Dismantle the Master's House," while MLK said "the law cannot make a man love me, but it can restrain him from lynching me." Somewhere between replacing the system and using the system lies a pragmatic – if easily derailed – course.

Lorde is telling us that a rotten system can't be redeemed by using its own chosen reform mechanisms. King's telling us that unless we live, we can't fight – so anything within the system that makes it easier for your comrades to fight on can hasten the end of the system.

Take the problems of journalism. One old model of journalism funding involved wealthy newspaper families profiting handsomely by selling local appliance store owners the right to reach the townspeople who wanted to read sports-scores. These families expressed their patrician love of their town by peeling off some of those profits to pay reporters to sit through municipal council meetings or even travel overseas and get shot at.

In retrospect, this wasn't ever going to be a stable arrangement. It relied on both the inconstant generosity of newspaper barons and the absence of a superior way to show washing-machine ads to people who might want to buy washing machines. Neither of these were good long-term bets. Not only were newspaper barons easily distracted from their sense of patrician duty (especially when their own power was called into question), but there were lots of better ways to connect buyers and sellers lurking in potentia.

All of this was grossly exacerbated by tech monopolies. Tech barons aren't smarter or more evil than newspaper barons, but they have better tools, and so now they take 51 cents out of every ad dollar and 30 cents out of ever subscriber dollar and they refuse to deliver the news to users who explicitly requested it, unless the news company pays them a bribe to "boost" their posts:

https://www.eff.org/deeplinks/2023/04/saving-news-big-tech

The news is important, and people sign up to make, digest, and discuss the news for many non-economic reasons, which means that the news continues to struggle along, despite all the economic impediments and the vulture capitalists and tech monopolists who fight one another for which one will get to take the biggest bite out of the press. We've got outstanding nonprofit news outlets like Propublica, journalist-owned outlets like 404 Media, and crowdfunded reporters like Molly White (and winner-take-all outlets like the New York Times).

But as Hamilton Nolan points out, "that pot of money…is only large enough to produce a small fraction of the journalism that was being produced in past generations":

https://www.hamiltonnolan.com/p/what-will-replace-advertising-revenue

For Nolan, "public funding of journalism is the only way to fix this…If we accept that journalism is not just a business or a form of entertainment but a public good, then funding it with public money makes perfect sense":

https://www.hamiltonnolan.com/p/public-funding-of-journalism-is-the

Having grown up in Canada – under the CBC – and then lived for a quarter of my life in the UK – under the BBC – I am very enthusiastic about Nolan's solution. There are obvious problems with publicly funded journalism, like the politicization of news coverage:

https://www.theguardian.com/media/2023/jan/24/panel-approving-richard-sharp-as-bbc-chair-included-tory-party-donor

And the transformation of the funding into a cheap political football:

https://www.cbc.ca/news/politics/poilievre-defund-cbc-change-law-1.6810434

But the worst version of those problems is still better than the best version of the private-equity-funded model of news production.

But Nolan notes the emergence of a new form of hedge fund news, one that is awfully promising, and also terribly fraught: Hunterbrook Media, an investigative news outlet owned by short-sellers who pay journalists to research and publish damning reports on companies they hold a short position on:

https://hntrbrk.com/

For those of you who are blissfully distant from the machinations of the financial markets, "short selling" is a wager that a company's stock price will go down. A gambler who takes a short position on a company's stock can make a lot of money if the company stumbles or fails altogether (but if the company does well, the short can suffer literally unlimited losses).

Shorts have historically paid analysts to dig into companies and uncover the sins hidden on their balance-sheets, but as Matt Levine points out, journalists work for a fraction of the price of analysts and are at least as good at uncovering dirt as MBAs are:

https://www.bloomberg.com/opinion/articles/2024-04-02/a-hedge-fund-that-s-also-a-newspaper

What's more, shorts who discover dirt on a company still need to convince journalists to publicize their findings and trigger the sell-off that makes their short position pay off. Shorts who own a muckraking journalistic operation can skip this step: they are the journalists.

There's a way in which this is sheer genius. Well-funded shorts who don't care about the news per se can still be motivated into funding freely available, high-quality investigative journalism about corporate malfeasance (notoriously, one of the least attractive forms of journalism for advertisers). They can pay journalists top dollar – even bid against each other for the most talented journalists – and supply them with all the tools they need to ply their trade. A short won't ever try the kind of bullshit the owners of Vice pulled, paying themselves millions while their journalists lose access to Lexisnexis or the PACER database:

https://pluralistic.net/2024/02/24/anti-posse/#when-you-absolutely-positively-dont-give-a-solitary-single-fuck

The shorts whose journalists are best equipped stand to make the most money. What's not to like?

Well, the issue here is whether the ruling class's sense of solidarity is stronger than its greed. The wealthy have historically oscillated between real solidarity (think of the ultrawealthy lobbying to support bipartisan votes for tax cuts and bailouts) and "war of all against all" (as when wealthy colonizers dragged their countries into WWI after the supply of countries to steal ran out).

After all, the reason companies engage in the scams that shorts reveal is that they are profitable. "Behind every great fortune is a great crime," and that's just great. You don't win the game when you get into heaven, you win it when you get into the Forbes Rich List.

Take monopolies: investors like the upside of backing an upstart company that gobbles up some staid industry's margins – Amazon vs publishing, say, or Uber vs taxis. But while there's a lot of upside in that move, there's also a lot of risk: most companies that set out to "disrupt" an industry sink, taking their investors' capital down with them.

Contrast that with monopolies: backing a company that merges with its rivals and buys every small company that might someday grow large is a sure thing. Shriven of "wasteful competition," a company can lower quality, raise prices, capture its regulators, screw its workers and suppliers and laugh all the way to Davos. A big enough company can ignore the complaints of those workers, customers and regulators. They're not just too big to fail. They're not just too big to jail. They're too big to care:

https://pluralistic.net/2024/04/04/teach-me-how-to-shruggie/#kagi

Would-be monopolists are stuck in a high-stakes Prisoner's Dilemma. If they cooperate, they can screw over everyone else and get unimaginably rich. But if one party defects, they can raid the monopolist's margins, short its stock, and snitch to its regulators.

It's true that there's a clear incentive for hedge-fund managers to fund investigative journalism into other hedge-fund managers' portfolio companies. But it would be even more profitable for both of those hedgies to join forces and collude to screw the rest of us over. So long as they mistrust each other, we might see some benefit from that adversarial relationship. But the point of the 0.1% is that there aren't very many of them. The Aspen Institute can rent a hall that will hold an appreciable fraction of that crowd. They buy their private jets and bespoke suits and powdered rhino horn from the same exclusive sellers. Their kids go to the same elite schools. They know each other, and they have every opportunity to get drunk together at a charity ball or a society wedding and cook up a plan to join forces.

This is the problem at the core of "mechanism design" grounded in "rational self-interest." If you try to create a system where people do the right thing because they're selfish assholes, you normalize being a selfish asshole. Eventually, the selfish assholes form a cozy little League of Selfish Assholes and turn on the rest of us.

Appeals to morality don't work on unethical people, but appeals to immorality crowds out ethics. Take the ancient split between "free software" (software that is designed to maximize the freedom of the people who use it) and "open source software" (identical to free software, but promoted as a better way to make robust code through transparency and peer review).

Over the years, open source – an appeal to your own selfish need for better code – triumphed over free software, and its appeal to the ethics of a world of "software freedom." But it turns out that while the difference between "open" and "free" was once mere semantics, it's fully possible to decouple the two. Today, we have lots of "open source": you can see the code that Google, Microsoft, Apple and Facebook uses, and even contribute your labor to it for free. But you can't actually decide how the software you write works, because it all takes a loop through Google, Microsoft, Apple or Facebook's servers, and only those trillion-dollar tech monopolists have the software freedom to determine how those servers work:

https://pluralistic.net/2020/05/04/which-side-are-you-on/#tivoization-and-beyond

That's ruling class solidarity. The Big Tech firms have hidden a myriad of sins beneath their bafflegab and balance-sheets. These (as yet) undiscovered scams constitute a "bezzle," which JK Galbraith defined as "the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it."

The purpose of Hunterbrook is to discover and destroy bezzles, hastening the moment of realization that the wealth we all feel in a world of seemingly orderly technology is really an illusion. Hunterbrook certainly has its pick of bezzles to choose from, because we are living in a Golden Age of the Bezzle.

Which is why I titled my new novel The Bezzle. It's a tale of high-tech finance scams, starring my two-fisted forensic accountant Marty Hench, and in this volume, Hench is called upon to unwind a predatory prison-tech scam that victimizes the most vulnerable people in America – our army of prisoners – and their families:

https://us.macmillan.com/books/9781250865878/thebezzle

The scheme I fictionalize in The Bezzle is very real. Prison-tech monopolists like Securus and Viapath bribe prison officials to abolish calls, in-person visits, mail and parcels, then they supply prisoners with "free" tablets where they pay hugely inflated rates to receive mail, speak to their families, and access ebooks, distance education and other electronic media:

https://pluralistic.net/2024/04/02/captive-customers/#guillotine-watch

But a group of activists have cornered these high-tech predators, run them to ground and driven them to the brink of extinction, and they've done it using "the master's tools" – with appeals to regulators and the finance sector itself.

Writing for The Appeal, Dana Floberg and Morgan Duckett describe the campaign they waged with Worth Rises to bankrupt the prison-tech sector:

https://theappeal.org/securus-bankruptcy-prison-telecom-industry/

Here's the headline figure: Securus is $1.8 billion in debt, and it has eight months to find a financier or it will go bust. What's more, all the creditors it might reasonably approach have rejected its overtures, and its bonds have been downrated to junk status. It's a dead duck.

Even better is how this happened. Securus's debt problems started with its acquisition, a leveraged buyout by Platinum Equity, who borrowed heavily against the firm and then looted it with bogus "management fees" that meant that the debt continued to grow, despite Securus's $700m in annual revenue from America's prisoners. Platinum was just the last in a long line of PE companies that loaded up Securus with debt and merged it with its competitors, who were also mortgaged to make profits for other private equity funds.

For years, Securus and Platinum were able to service their debt and roll it over when it came due. But after Worth Rises got NYC to pass a law making jail calls free, creditors started to back away from Securus. It's one thing for Securus to charge $18 for a local call from a prison when it's splitting the money with the city jail system. But when that $18 needs to be paid by the city, they're going to demand much lower prices. To make things worse for Securus, prison reformers got similar laws passed in San Francisco and in Connecticut.

Securus tried to outrun its problems by gobbling up one of its major rivals, Icsolutions, but Worth Rises and its coalition convinced regulators at the FCC to block the merger. Securus abandoned the deal:

https://worthrises.org/blogpost/securusmerger

Then, Worth Rises targeted Platinum Equity, going after the pension funds and other investors whose capital Platinum used to keep Securus going. The massive negative press campaign led to eight-figure disinvestments:

https://www.latimes.com/business/story/2019-09-05/la-fi-tom-gores-securus-prison-phone-mass-incarceration

Now, Securus's debt became "distressed," trading at $0.47 on the dollar. A brief, covid-fueled reprieve gave Securus a temporary lifeline, as prisoners' families were barred from in-person visits and had to pay Securus's rates to talk to their incarcerated loved ones. But after lockdown, Securus's troubles picked up right where they left off.

They targeted Platinum's founder, Tom Gores, who papered over his bloody fortune by styling himself as a philanthropist and sports-team owner. After a campaign by Worth Rises and Color of Change, Gores was kicked off the Los Angeles County Museum of Art board. When Gores tried to flip Securus to a SPAC – the same scam Trump pulled with Truth Social – the negative publicity about Securus's unsound morals and financials killed the deal:

https://twitter.com/WorthRises/status/1578034977828384769

Meanwhile, more states and cities are making prisoners' communications free, further worsening Securus's finances:

https://pluralistic.net/2024/02/14/minnesota-nice/#shitty-technology-adoption-curve

Congress passed the Martha Wright-Reed Just and Reasonable Communications Act, giving the FCC the power to regulate the price of federal prisoners' communications. Securus's debt prices tumbled further:

https://www.govtrack.us/congress/bills/117/s1541

Securus's debts were coming due: it owes $1.3b in 2024, and hundreds of millions more in 2025. Platinum has promised a $400m cash infusion, but that didn't sway S&P Global, a bond-rating agency that re-rated Securus's bonds as "CCC" (compare with "AAA"). Moody's concurred. Now, Securus is stuck selling junk-bonds:

https://www.govtrack.us/congress/bills/117/s1541

The company's creditors have given Securus an eight-month runway to find a new lender before they force it into bankruptcy. The company's debt is trading at $0.08 on the dollar.

Securus's major competitor is Viapath (prison tech is a duopoly). Viapath is also debt-burdened and desperate, thanks to a parallel campaign by Worth Rises, and has tried all of Securus's tricks, and failed:

https://pestakeholder.org/news/american-securities-fails-to-sell-prison-telecom-company-viapath/

Viapath's debts are due next year, and if Securus tanks, no one in their right mind will give Viapath a dime. They're the walking dead.

Worth Rise's brilliant guerrilla warfare against prison-tech and its private equity backers are a master class in using the master's tools to dismantle the master's house. The finance sector isn't a friend of justice or working people, but sometimes it can be used tactically against financialization itself. To paraphrase MLK, "finance can't make a corporation love you, but it can stop a corporation from destroying you."

Yes, the ruling class finds solidarity at the most unexpected moments, and yes, it's easy for appeals to greed to institutionalize greediness. But whether it's funding unbezzling journalism through short selling, or freeing prisons by brandishing their cooked balance-sheets in the faces of bond-rating agencies, there's a lot of good we can do on the way to dismantling the system.

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/04/08/money-talks/#bullshit-walks

Image: KMJ (modified) https://commons.wikimedia.org/wiki/File:Boerse_01_KMJ.jpg

CC BY-SA 3.0 https://creativecommons.org/licenses/by-sa/3.0/deed.en

[mikami1992]

The situation is becoming more and more chaotic…

Over the past month, a series of kidnappings of politicians and businessmen have taken place throughout the country.

The latest victim?

Lex Luthor was the 10th victim and it occurred during a press conference in front of the Lex Corp building… The modus operandi was the same as the previous ones, a group of people with helmets and white motorcycle suits, along with green lacer weapons assaulted the tycoon and proceeded to take him away under the newly discovered Anti-Ecto law, once again there was a confrontation between the "Hunters" and the security group of the place, again nothing could be done and several of the guards were taken away under the charge of terrorism according to the guidelines of the previous law…..

o

The teenagers of Amity Park decided to make an unconventional protest to publicize and accelerate the repeal of the Anti-Ecto Laws, said proposal consists of kidnapping the politicians who approved the law (knowing about it) as well as the businessmen with more questionable practices.

The idea ended up emerging when, noticing how the GIW began to check humans for ecto-contamination, they decided to make a "Jewel" with the sole purpose of fooling the government's sensors.

Once they had it ready, the Phantom team had to explain to the rest of the town's teenagers how and why they had to use the device…

And amidst all the chaos of the situation, the crazy group of teenagers decided that they had to do something to stop the laws, so they made the following plan…

Reverse the jewels so that they create a false ectoplasmic signature.

Implant it in politicians, businessmen or any questionable person so that they are "ecto entities"

Use a scanner "approved" by the GIW, that is, by the government, and identify them as ecto entities

Proceed to kidnap them in the most public way possible while shouting anti-ecto acts.

Wait for the chaos in the government and the repeal of the laws.

[narrative-stars]

SECURITY DETAIL! AARON in this ESSAY I WILL

[holdmyhandnow]

do you ever think about how hold my hand is about overcoming insecurities and embracing who you are and youth is about being unashamedly you no matter what others think

and how these two performances are the only ones that physically overlap

because i think about it

[skizabaa]

Magma doodle: ROAD TRIP!

[dykedvonte]

I think a big misunderstanding is the power people give Curly to actually change things about the way the pony express operates or could’ve done things on the Tulpar.

We are talking about a company that docks pay for bad synergy despite mandated psych evals that should tell which staff members would work well together, only allots for 5 hours of sleep despite having literally no other tasks to truly do and locks all resources behind the access of one person. The last one is likely to manage resources and make it easier to justify collective punishment and blaming one person for it; someone needs something in “excess” or the captain gives in? It’s all on them your pay is docked. Instant resentment.

It’s insidious how the company works, it’s by design to distract you from coming after them, to force tensions to line their own pockets. With all the restrictions and forced interactions, altercations are bound to happen. 5 hours of sleep a day, limited sources of entertainment, no real tasks… the monotony alone would cause bad cabin fever, mix that with just only one absolute mediator and you get the exact environment that allows shit like in the game to happen.

The idea he could just complain and try to throw his weight around to get them to dig into their pocket for the crews comfort is laughable and misses the predatory and dehumanizing aspect of capitalism the Pony Express represents. Curly was and is still just another asset to them. Being a top show pony doesn’t mean he’s anywhere close to the actual top. He is the top of the working ladder, not whoever’s in corporate, he wouldn’t even be on the bottom step unlike what Jimmy perceives. The resounding recommendations he would get are almost mocking as they throw him out like nothing just like the rest. Being a shitty fucking company, how much do you bet they’d mean anything anyways, especially since he wanted to leave the field all together.

He made a fuss and they didn’t listen, he says he should’ve done more but you can tell he knows it wouldn’t have changed anything. Jobs like this are willing to make a sacrifice if it means even a penny more. Curly makes a bigger fuss they likely would’ve just found an “unrelated” reason to fire him, hired a more pliable guy or, terrifyingly, promoted Jimmy. The company was failing, going to shut down whether anything happened on the ship or not. But knowing that they were shutting down and that everyone, including him, would be out of a job with this being their last paycheck, he had to factor in not destroying the last bit of their financial stabilities combined with every other issue on the vessel and his own. He gets another cryopod or locks and then he has to break to them that they are not only fired but there will be substantial cuts to their paychecks due to the “upgrades” (things that already should’ve been in place on their part) on top of anything else that could be docked along the way.

You can blame him for saying it so early into the trip but then again, if he mentioned it later who’s to say it wouldn’t have been worse? On the capitalism side alone how would people in a galaxy away from home, out of a job and already stir crazy react? Don’t get me started on how Jimmy would have reacted if he realized he only had two days left to fix what would be a very hard to miss “problem” in his head…

I can’t even consider explaining this as devils advocate because it’s just facts of the world we and they live in and factors that heavily affected the situation. People are just so quick to make claims on the ease of the choices when P.E literally makes it hard to choose to do anything but suck it up.

[nationallawreview]

Changes to Conditions of SEC Rule 10b5-1 Obligations

New amendments to insider-trading regulations are about to go into effect. SEC Rule 10b5-1 has long provided an affirmative defense to insiders who trade under a written plan adopted in good faith and who lack material nonpublic information (MNPI). Over the years, pundits have noticed that trades under Rule 10b5-1 plans have been unusually profitable, suggesting that some insiders might have…

[philosophybits]

Man did not enter into society to become worse than he was before, nor to have fewer rights than he had before, but to have those rights better secured.

Thomas Paine, Rights of Man

[captainuranium543]

It is well known that erza has always been a stickler for rules especially early on, HOWEVER I feel that this is a slight misconception as it implies she's a stickler for ALL rules.

In reality, erza is only serious about the rules set in place by master Makarov. If it directly affects the guild or her friends she cares, when it comes to actual laws though? Man fuck that.

Genuinely I don't think ANYONE in fairy tail has less respect for the government then erza does and the reason for that is simple, internal corruption of it is a massive part of why the tower of heaven stayed active for so long. She'll go along with their rules as long as it affects the guild because she's aware they hold the power to disband them or get Makarov in trouble, but as soon as they don't all bets are off and someone is gonna get arrested.

[ohitslen]

College (uni??) AU catering to my own interests as it should always be hehe :)