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Welcome to Lookzy. In today's Lookzy:

• Covington is sued by the SEC

• FTX judge says senators' letter is 'inappropriate'

• Subway considering selling itself for more than $10 billion

• WWE sale rumors denied amid leadership battle and suits

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COVINGTON SUED BY THE SEC

The SEC sued Covington & Burling, seeking details about 298 of the firm's clients whose information was accessed by state-sponsored hackers in previously undisclosed cyberattack.

The Hafnium cyberhacking group, which has been tied to the Chinese government, was able to enter Covington's systems and access confidential information about these 298 public company clients in November 2020.

The SEC is interested in these details because it wants to investigate possible securities violations associated with the hack. Covington, being represented by Gibson Dunn in this matter, is resisting because it alleges it is bound by attorney-client privilege and client confidentiality. Covington claims that only seven of the affected companies’ files contained information that could be material to investors, but the SEC is unable to confirm this without accessing those details.

Covington's Gibson Dunn team noted that the hack was directed at a small group of lawyers and advisors” and was focused on “policy issues of specific interest to China in light of the incoming Biden Administration.”

ECON SNAPSHOT

The difference between special bonuses and layoffs

THE VERDICT

Arguing today's litigation news

Frank lied. JPM filed a suit against the founder of fintech startup called Frank, which JPM had acquired in 2021 for $175 million. The suit claims that Frank created 4 million fake users to entice JPM to buy it, having only 300,000 real customers.

Created by AI. A top lawyer at Orrick's Supreme Court practice believes that artificial intelligence should be able to be listed as the inventor on patent applications and has indicated that he's helping take up a legal campaign to get SCOTUS to force the U.S. Patent and Trademark Office to do so.

Ex parte. FTX's bankruptcy judge ignored the concerns four US senators regarding the ties between Sullivan & Cromwell and FTX, saying he won't take "inappropriate ex parte communication" into account when considering the approval of counsel in the case. We dissected the letter in yesterday's issue linked here.

SPAC coercion. A proposed class action by investors against electric car maker Lucid Group was dismissed by a California federal judge. The suit claimed that the investors were coerced into buying stock in the SPAC ahead of its $11 billion merger with Lucid.

THE DEAL

Wheelin' and dealin' today's corporate news

Eat fresh. Subway has reportedly retained advisors to explore a sale of the business, which could value the currently privately-held company at more than $10 billion. Subway has more than 37,000 restaurants in over 100 countries.

Barbarians at the park gates. Activist investor Nelson Peltz's hedge fund Trian Capital Management plans to mount a proxy fight for a seat on Disney's board following Bob Iger's return to Disney as CEO. Disney revealed Trian's intention and said it would oppose Peltz joining the board. Disney also announced that Nike executive chairman Mark Parker would join the board.

WWE controversy. Tweets from World Wrestling Entertainment insiders said that WWE had been sold to Saudi Arabia's Public Investment Fund, but those rumors were subsequently denied and the relevant tweets were deleted. The WWE is currently worth approximately $6.5 billion, and the sale controversy coincides with the potential return of founder and controlling shareholder Vince McMahon and the resignation of his daughter and current co-CEO Stephanie McMahon. Vince McMahon is separately facing investor litigation over claims he pushed aside the board to illegally install himself as chairman

Crypto fire sale. Digital Currency Group, a crypto holdco and VC, is considering offloading its large venture portfolio to help pay down the nearly $3 billion in debt accrued by subsidiary Genesis, a lender in the space which reportedly faced significant losses from each of Luna's collapse, Three Arrows Capital's blowup and FTX's contagion. Genesis is also currently fighting with Winklevoss-founded crypto exchange Gemini over funds.

BUSINESS OF THE FIRM

Lateral Moves:

• Simpson Thacher hired partner Leah Malone from PricewaterhouseCoopers.

• Davis Wright Tremaine hired Ryan Richardson, the former Lead Global Partnerships Counsel at Stripe.

• Cadwalader hired partner Andrew Carlon from Cravath.

• Littler Mendelson recruited 65 lawyers from French management-side employment firm Fromont Briens after dissolving its long-standing partnership with the firm earlier this month.

Industry News:

• Gunderson first years are set to start next week after having their original start dates of October 31 be deferred due to market conditions.

• Kirkland partner Michael Steele, who is expected to leave the firm to permanently join PE firm GLP Capital Partners, bought a $38 million mansion in Malibu.

• A Law360 investigation found that former New York State Chief Judge Janet DiFiore cost taxpayers an estimated $1 million a year for her around-the-clock chauffeur and protection detail, but there is no record of any written approval for these services.

• Still waiting on your bonus? Check out the Lookzy Reverse Bonus Tracker to see who else is left to announce.

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