Titan Global Capital Management USA LLC, a New York-based fintech investment adviser, hasagreedto pay over $1 million to settle charges brought by the U.S. Securities and Exchange Commission (SEC).
The charges pertain to misleading statements made by Titan about performance metrics and the custody of clients' crypto assets.
The settlement represents the first violation under a recently-amended SEC rule aimed at preventing fraud related to hypothetical metrics.
The SEC alleged that Titan misled investors through statements on its website, touting hypothetical returns from August 2021 to October 2022.
Titan's claims highlighted annualized crypto performance results as high as 2,700%, but the SEC revealed that these figures were extrapolated from a purely hypothetical three-week period.
This contradicted the SEC's new marketing rule, which permits the use of such metrics under specific requirements designed to prevent deceptive practices.
Although Titan neither admitted nor denied the SEC's findings, the company settled by agreeing to a cease-and-desist order and a censure. Additionally, Titan will pay a $850,000 civil penalty that will be distributed to affected clients, along with ill-gotten gains and interest amounting to over $192,000.
Regulators discovered that Titan made inconsistent statements to clients about its handling of custody for crypto assets and failed to establish proper policies for employee trading of crypto assets.
This settlement comes from the SEC's heightened scrutiny of investment advisers' compliance with custody rules regarding client crypto assets.
Titan's resolution with the SEC reflects the trend of firms opting for settlements to avoid lengthy litigation processes in the fintech space. The case underscores the need for transparency, accuracy, and adherence to regulatory guidelines in the fast-evolving landscape of fintech investments.
Meta CEO Mark Zuckerberg makes a keynote speech at the Meta Connect annual event, at the company’s headquarters in Menlo Park, California, U.S. September 25, 2024.
Manuel Orbegozo | Reuters
Meta CEO Mark Zuckerberg plans to continue his company’s artificial intelligence spending blitz well into the next year as rival tech giants do the same.
Zuckerberg told analysts Wednesday during a second-quarter earnings call that AI’s rapid pace of progress has informed much of Meta’s recent business decisions, including the company’s $14.3 billion June investment into the data-annotating startup Scale AI as part of a revamped AI strategy involving a wave of high-profile hires.
AI’s swift advancement warrants that Meta have “the absolute best and most elite talent-dense team” that can access the resources they need from a “leading compute fleet,” Zuckerberg said about the AI Superintelligence team he assembled for his company this summer. Whatever these top-tier AI researchers build can then be implemented throughout Facebook, Instagram and the rest of the company’s family of apps, he said.
“When we take a technology, we’re good at driving that through all of our apps and our ad systems,” Zuckerberg said. “There’s no other company that is as good as us at kind of taking something and getting it in front of billions of people.”
Those AI endeavors, however, come at a cost.
Meta on Wednesday said it expects its total expenses for 2025 to come in the range of $114 billion and $118 billion, raising the low end of its previous outlook of between $113 billion and $118 billion. And while Meta is still planning out next year, the company said its AI initiatives will “result in a 2026 year-over-year expense growth rate that is above the 2025 expense growth.”
Other tech giants are also spending heavy on AI projects and talent.
Alphabet said last week during its earnings report that it is raising its 2025 capital expenditures forecast to $85 billion, which is $10 billion higher from its prior forecast. Microsoft said Wednesday that its fiscal first-quarter capital expenditures will be $30 billion, ahead of analyst expectations of $24.23 billion.
For now, investors are OK with Meta’s big AI investments, with the company’s shares up nearly 12% in after-hour trading on Wednesday. It helps that Meta reported strong second-quarter earnings that beat on the top and bottom while providing third-quarter sales guidance that topped Wall Street expectations.
It also helps that Zuckerberg said AI drove “greater efficiency and gains across our ad system,” likely reassuring worried investors that Meta’s big AI spending is leading to some immediate results.
And while the company’s Reality Labs unit continues bleeding money, posting an operating loss of $4.53 billion in the second quarter, the surprise hit of the Ray-Ban Meta smart glasses seems to have quelled investor discontent for the time being.
“I continue to think that glasses are basically going to be the ideal form factor for AI, because you can let an AI see what you see throughout the day, hear what you hear, talk to you,” Zuckerberg said. “Once you get a display in there, whether it’s the kind of wide holographic field of view, like we showed with Orion, or just a smaller display that might be good for displaying some information, that’s going to unlock a lot of value, where you can just interact with an AI system throughout the day.”
Airlines have reacted furiously after a technical glitch in air traffic control systems led to more than 150 flight cancellations.
The National Air Traffic Service (NATS) has apologised for the IT problems – and said systems were back up and running 20 minutes after the “radar-related issue” was detected at 4.05pm.
But with thousands of passengers suffering extensive travel disruption, during one of the busiest times of the year, airline executives have warned this isn’t good enough.
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1:01
Departures resume after ATC problem
Ryanair’s chief operating officer Neal McMahon has called for NATS chief executive Martin Rolfe to resign – and claimed Wednesday’s incident was “utterly unacceptable”.
He said: “It is outrageous that passengers are once again being hit with delays and disruption due to Martin Rolfe’s continued mismanagement of NATS.
“It is clear that no lessons have been learnt since the August 2023 NATS system outage, and passengers continue to suffer as a result of Martin Rolfe’s incompetence.”
Mr McMahon was referring to a glitch that affected more than 700,000 passengers two years ago – and said that, if Mr Rolfe refuses to step down, the government should intervene.
“Heidi Alexander must act without delay to remove Martin Rolfe and deliver urgent reform of NATS’ shambolic ATC service, so that airlines and passengers are no longer forced to endure these preventable delays caused by persistent NATS failures,” he added.
The Department for Transport says Ms Alexander does not have any direct control over NATS – and no powers over staffing decisions at the service.
Image: Martin Rolfe in 2023. Pic: PA
EasyJet’s chief operating officer David Morgan added: “It’s extremely disappointing to see an ATC failure once again causing disruption to our customers at this busy and important time of year for travel.
“While our priority today is supporting our customers, we will want to understand from NATS what steps they are taking to ensure issues don’t continue.”
NATS is yet to comment on the calls for Mr Rolfe’s resignation – but has stressed that the glitch is not believed to be “cyber related”.
“This was a radar-related issue which was resolved by quickly switching to the back-up system during which time we reduced traffic to ensure safety,” a spokesperson had said.
Departures at airports across the country have now resumed – but passengers are being urged to check with their airline before heading to terminals.
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5:06
Travel expert: This is a major outage
John Carr, from Stourbridge, was on his way from Heathrow to Norway to help arrange his brother’s wedding when he discovered his flight was cancelled after checking in.
“I’m pretty gutted,” he said. “We’ve got loads of stuff in the suitcases to set up the venue, because we’re obviously flying to Norway. We’ve got the wedding rehearsal to do. It’s quite stressful.”
Liberal Democrat leader Sir Ed Davey called for an urgent investigation and also referred to the “utterly unacceptable” disruption two years earlier.
“With thousands of families preparing to go on a well-earned break, this just isn’t good enough. The public deserve to have full confidence in such a vital piece of national infrastructure.”
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Airlines may have to provide compensation, although there are exemptions for “extraordinary circumstances”, according to the UK’s Civil Aviation Authority.
Elon Musk has expanded a number of his companies within Texas, including Tesla, SpaceX, the Boring Co. and Neuralink. Tesla broke ground on a lithium refinery in Texas earlier this year with Governor Greg Abbott in attendance.
Elon Musk’s tunneling venture, The Boring Company, announced plans earlier this week to build a 10-mile underground loop in Nashville, in coordination with Tennessee Republican Governor Bill Lee, who put out a press release praising the project.
Democratic lawmakers in Nashville are demanding answers on the plans, while the state’s Republican leaders have jumped at the chance to partner with Musk. A state commission is holding an emergency meeting and public hearing Thursday morning to discuss a “no cost/mutual benefit” lease arrangement that’s been proposed to help the company get the tunnels started.
“We are aware of the state’s conversations with the Boring Company, and we have a number of operational questions to understand the potential impacts on Metro and Nashvillians,” Freddie O’Connell, Nashville’s mayor, said in an e-mailed statement.
Based in Pflugerville, Texas, The Boring Co. is poised to take over a chunk of public property about the size of a football field in downtown Nashville. The commission that’s meeting on Thursday includes Tennessee’s governor, speaker of the house, speaker of the senate and secretary of state. Members of the public were invited to give testimony but with less than a week’s notice.
On Monday, The Boring Co. and state officials divulged that Musk’s venture would dig its tunnels under state-owned roadways in order to “connect downtown and the Convention Center to Nashville International Airport with a transit time of approximately 8 minutes.”
It’s called the Music City Loop, and the project marks Musk’s latest effort to bolster his budding business empire in Tennessee. His artificial intelligence startup xAI, the parent of social media platform X, is building data centers and a power plant in Memphis, on the western side of the state.
The governor’s office said on Monday that the Nashville project would come “at zero cost to taxpayers” and would be “entirely privately funded,” though no details were provided about whether or what type of cost-benefit analysis, environment, safety or traffic assessment had been completed by the state before agreeing to the deal.
Musk became a major force in Republican politics last year, when he spent almost $300 million to help reelect President Donald Trump before working for the Trump administration in the first few months of this year. Musk brought The Boring Co. CEO Steve Davis with him to lead Trump’s DOGE initiative, slashing federal agencies, regulations and personnel.
Justin Jones, a Democratic state representative in Nashville, told CNBC on Wednesday that his district had not been able to participate in any public comment period, and hadn’t seen any environmental impact report or health assessment related to the Music City Loop or its construction.
‘Not allowed to be here’
On Wednesday evening, The Boring Co. held a recruiting event, with Davis in attendance, at the parking lot where the company expects the state to grant it a no-cost lease. Jones went to the event hoping to discuss the jobs that Musk’s company is looking to create in his district, the lawmaker told CNBC.
“The CEO is here and the other members of their team, but they sent someone out to tell me that I’m not allowed to be here,” Jones said in a text message, sharing a video of his interaction with The Boring Co. employees at the event.
On Monday, Jones arrived to a separate company event at the Nashville airport only to have authorities claim he lacked proper credentials to attend.
Jones told CNBC that state officials explained to him that only state-level authorizations would be required for The Boring Co. project to begin because the tunnels would go under state roads, and would not require the use of taxpayer funds.
“We’re not even being informed where or what exactly these tunnels are going to run through,” Jones said. “Tomorrow they’re voting to give away state land for no cost. But giving away land obviously has a cost.”
The governor’s office didn’t respond to a request for comment regarding Jones’ concerns. Representatives for The Boring Co. weren’t immediately available to comment.
The Boring Co. has previously built tunnels in Las Vegas, including an initial two miles to carry visitors to different exhibit halls around the Las Vegas Convention Center. Tesla drivers travel through the tunnels to pick up and drop off passengers, who book their rides using an app.
The initial loop cost Nevada taxpayers about $50 million and has been criticized for a lack of pedestrian entrances, walkways and platforms, and its limitations relative to a subway system. The Boring Co. was previously fined by the Nevada Occupational Safety and Health Administration for repeated violations and worker injuries in Las Vegas.
The Musk-ownedcompany also abandoned plans to build tunnels in other locations, including Chicago.
One particular concern in Nashville is that the city is prone to flooding with an average annual rainfall of around 50 inches, according to the National Weather Service, which compares to around 4 inches in Las Vegas. The city’s Metro Water Services previously arranged, with federal support, to purchase homes from residents in vulnerable areas at reduced prices, and convert the land there to green spaces.
The Boring Co. has no experience building in areas with that kind of rainfall and flooding concern.
The public hearing to discuss whether the state will give the parking lots to The Boring Co. in a no-cost, mutual benefit lease agreement starts at 8 a.m. local time on Thursday at Cordell Hull State Office Building, according to a copy of the agenda on the state government’s website.
In Memphis, xAI has faced a community backlash over its use of natural gas-burning turbines which power its data center and supercomputer there. The facility, housed in a former home appliance factory, is responsible for training xAI’s controversial chatbot Grok.
The NAACP and other environmental and public health advocates are suing xAI, saying the company exacerbated air pollution in the area, harmed majority-Black communities who live near their facilities, and violated the Clean Air Act. An xAI spokesperson said at the time the groups announced their intent to sue that the company takes “our commitment to the community and environment seriously.”