Welcome back to Inside Track!

Startups are in a unique position where a general counsel or chief legal officer has the chance to grow the department to their preferences. This week, I had two interviews with attorneys from newer companies on what kind of talent they would want in their legal departments.

Sven Kaludzinski, the newly appointed general counsel at fintech company Aura, said he wants attorneys with corporate experience.

"We want to build on the strong compliance and legal framework in the space," Kaludzinski said.

He said he wants to hire attorneys with experience in data privacy and finance.

"It's the gamut of what you would see in many different lenders," Kaludzinski said. "But we're also looking for folks that are on board with the mission."

Dennis Beker, recently hired as the vice president of legal and business strategy at Materia Ventures, a Canadian cannabis company hoping to break into the European market, told me he needs attorneys with corporate and international experience.

"I think someone who has some international experience just because a lot of operations are focused in Europe for now," Beker explained. "Corporate experience is helpful. I think somebody with a broad skill set will be helpful."

What kind of talent would you hope to have in your legal department if you were the top lawyer of a startup? Let me know at [email protected].

What's Happening

Disclosing Political Spending

An increasing number of companies are adopting stronger measures to disclose their spending on political campaigns because of the current political climate. According to the ninth annual CPA-Zicklin Index report, 316 companies disclosed some or all of their political spending in 2019, which is up from 294 in 2018.

Bruce Freed, president of the Center for Political Accountability, told Corporate Counsel that political contributions can be especially damaging when they are discovered after being kept secret.

Former chief justice to the Delaware Supreme Court, Leo Strine Jr. said in the report that companies must worry about contributions that clash with their values.

"Companies themselves face heightened risks from the Wild West environment that now surrounds political spending," Strine said. "Contributions that conflict with their core values and positions endanger their reputations, their relationship with consumers and employees and their bottom lines."

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Lawyer Indicted For Insider Trading

Gene Levoff, a former in-house attorney at Apple Inc., was indicted last week on charges of insider trading.

Between February 2011 and April 2016, Levoff allegedly "misappropriated material, nonpublic information about Company-1's [Apple] financial results and then executed trades involving the company's stock." His alleged scheme allowed him to make $27,000 on certain trades and avoid losses of approximately $377,000 on others, according to prosecutors.

Levoff was subject to blackout periods where he was barred from engaging trades during certain periods of time. Federal prosecutors further claimed he engaged in trades without Apple's knowledge.

Levoff also faces a civil suit by the Securities and Exchange Commission for alleged insider trading. His attorney, Kevin Marino, of Marino, Tortorella & Boyle in Chatham, New Jersey, said he looks forward to vigorously representing Levoff.

What I've Been Reading

Jeanette Chan, the chief compliance officer and general counsel at fintech startup Airwallex, said her first priority in her new job is to build a strong in-house legal and compliance team, according to a report in Asian Legal Business. She said her second priority is to gain the trust of regulators by showing them the legal and compliance teams are dedicated to following the law.

John Vardaman, the chief compliance officer and general counsel of Simplifya, a cannabis compliance software company, said cannabis can be the most transparent business to bank, according to a report in Banking Dive. "The cannabis industry can become the most transparent industry for banks, because you have more details available into their activity than any other business," Vardaman said. "When banks become aware of that, they can use it to their advantage." He also said he expects big banks to open up to the industry if the SAFE Banking Act becomes law.

The U.S. Department of Justice charged the chief compliance officer of GPB Holdings, Michael Cohn, with stealing information from the SEC before he started working for the company, according to a report in Investment News. Before joining GPB, Cohn worked as a securities compliance examiner at the SEC, the report said.

Don't Miss

Wednesday Nov. 13 – Thursday, Nov. 14 – Leaders Circle will be hosting its Global Counsel Leaders Autumn Conference North America at Eversheds Sutherland in New York City. Speakers will include Alexia Maas, senior vice president and general counsel at Volvo Financial Services, and Darren Guy, head of global legal and regulatory operations at AIG.

Tuesday, Nov. 19 – The Practising Law Institute will be hosting a Hot Topics For In-House Counsel event at the group's office in New York City. Topics covered will include developments in legal operations and artificial intelligence, the domestic and international antitrust landscape and intellectual property.

Friday, Nov. 22 – Dinsmore Legal Counsel will be hosting the 2019 In-House and General Counsel Symposium at the Columbus Bar Association in Columbus, Ohio. Topics will include corporate governance, cybersecurity and current trends in money laundering.

On The Move

✦ Druva ✦ Jung-Kyu McCann has joined the California-based data security firm as its first general counsel. She previously worked in-house at Broadcom and Apple Inc.

✦ Crypto Asset Rating Inc. ✦ Jake Prudhomme has been made the first chief legal officer of the fintech startup. He previously worked as senior counsel to the SEC. The company is developing a rating system for unregulated crypto and blockchain markets.

✦ Aura ✦ Sven Kaludzinski has been named the first general counsel of the San Francisco-based fintech lender. Kaludzinski previously worked as general counsel of Ygrene Energy Fund.