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Cleary Gottlieb Discusses DOJ National-Security Case Declinations Under Corporate Enforcement Policy

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On April 30, 2025, the Department of Justice’s (“DOJ”) National Security Division (“NSD”), alongside the U.S. Attorney’s Office for the Northern District of California, announced a declination to prosecute Universities Space Research Association (“USRA”) for criminal export control violations committed …

Morrison & Foerster Discusses DOJ’s New Digital Asset Enforcement Policy

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On April 7, 2025, Deputy Attorney General Todd Blanche issued a memo (the “Blanche Memo”) announcing the Trump administration’s Department of Justice (“DOJ”) refocus of enforcement policies related to investigations and prosecutions of individuals and entities involved with digital assets. …

Sidley Austin Discusses CFTC Advisory on Self-Reporting, Cooperation, and Remediation

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On February 25, 2025, the Division of Enforcement (Enforcement Division) of the U.S. Commodity Futures Trading Commission (CFTC) released an Enforcement Advisory on Self-Reporting, Cooperation, and Remediation (Advisory). The Advisory is the Enforcement Division’s “sole policy on self-reporting, cooperation, and …

Fried Frank Discusses SEC Expansion of Nonpublic Review Accommodations for Registration Statements

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The Division of Corporation Finance of the Securities and Exchange Commission (the SEC) is expanding the available accommodations relating to nonpublic review of draft registration statements.

Previously, such accommodations had been available only to a subset of issuers:  In 2012, …

The Limits of Shareholder Ratification

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In a recent article, I analyze the function of shareholder ratification in corporate governance and argue that understanding this function is critical to both refining shareholder-based cleansing mechanisms and appreciating their inherent limitations. Although I focus on Corwin cleansing in …

Paul Weiss Discusses Delaware Decision Applying Business Judgment Rule to “Clear Day” Approval of Reincorporation

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In Maffei v. Palkon, the Delaware Supreme Court unanimously held that the business judgment rule applies to a corporation’s decision to change its state of incorporation, even if the move arguably favors a controlling stockholder by reducing future liability …

Wachtell Lipton Discusses Trump Administration’s New White-Collar Enforcement Priorities

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In our most recent memorandum, we predicted that President Trump’s second administration would likely entail a significant overhaul of DOJ’s agenda and enforcement priorities.  Although we are less than a month into the new Trump Administration, we have already seen …

Fixing MFW

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Delaware’s regime governing controlling shareholders relies on the courts’ ability to police conflicted transactions under the stringent “entire fairness” standard of review. In theory, judicial review under this standard allows judges to distinguish between fair transactions and those that are …

How to Improve the Bank Charter Application Process

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New bank formation in the United States is at an all-time low, and Americans increasingly rely on non-bank financial technology companies (fintechs) to satisfy their financial services needs. Fintechs that do not operate through banks mostly operate outside the direct …

ESG Dealmaking

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Environmental, social and governance (“ESG”) concerns are driving businesses globally to re‐calibrate their mergers and acquisitions (M&A). In a new article, I contend that, despite a growing ESG backlash in the United States, ESG issues will continue to be …

Wachtell Lipton Discusses Important Appellate Court Decisions for Syndicated Loan Market

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On December 31, 2024, two separate appellate courts issued notable decisions addressing so-called “uptier” transactions.  In a typical uptier transaction, a majority of lenders under a credit agreement, in connection with amending the credit agreement and providing additional financing, are …

Everything Is Rational Apathy

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Rational apathy stands at the center of current and long-time developments and debates in corporate governance and activism. Dominance of index funds in share ownership, prevalence of proxy advisers, pass-through voting programs, trading proxy votes on an exchange, and the …

Arnold & Porter Discusses CFPB Report on Privacy-Protection Gaps for Financial Service Customers

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The Consumer Financial Protection Bureau (the CFPB) recently released a report identifying limits in federal privacy protections afforded by the Fair Credit Reporting Act (FCRA) and Gramm-Leach-Bliley Act (the GLBA). The report strongly encourages state policymakers to consider how consumers …

Sullivan & Cromwell Discusses Director and Creditor Liability in Distressed Companies Under Delaware Law

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On November 15, 2024, the Delaware Court of Chancery found that certain of the directors of Bridge Street Worldwide, Inc. (“BSW”), a Delaware corporation, were liable for breaching their fiduciary duty of loyalty by entering into a forbearance agreement with …

Gibson Dunn Discusses New U.S. Outbound Investment Regulations

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On October 28, 2024, the U.S. Department of the Treasury issued final regulations implementing an outbound investment control regime targeting AI, semiconductors, and quantum computing investments involving China that raise national security concerns. The regulations’ prohibitions and reporting requirements go …

Ropes & Gray Discusses SEC Settlements With Four Issuers in Cybersecurity-Disclosure Cases

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On October 22, 2024, the Securities and Exchange Commission (“SEC”) filed settled enforcement orders involving four current and former public companies – Unisys Corp., Avaya Holdings Corp., Check Point Software Ltd, and Mimecast Limited. The settlements concern the issuers’ disclosures …

Moving from Agency Costs and Private Benefits of Control to Principal Costs and Private Benefits of Influence ­

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Corporate governance research has historically focused on agency costs (imposed by professional managers) or principal-principal expropriation (imposed by dominant shareholders). We seek to reverse this theoretical focus on private benefits of control, and its preoccupation with the principal/shareholder and agent/manager …

Davis Polk Discusses Commerce Department Guidance Expanding Export-Control Requirements for Financial Institutions

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On October 9, 2024, the Commerce Department’s Bureau of Industry and Security (BIS) issued new guidance for financial institutions on best practices for compliance with export control laws and regulations (the Guidance).[1] The Guidance caps a series of notes …

Arnold & Porter Discusses Final FinCEN Rules for Investment Advisers Under Bank Secrecy Act

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On August 28, 2024, the Financial Crimes Enforcement Network (FinCEN) issued a final rule to add “investment adviser” to the definition of “financial institution” under the regulations implementing the Bank Secrecy Act (BSA). The final rule defines the term “investment …

Business Judgment and ESG

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New research provides evidence that legally nonbinding commitments from corporate managers to Environmental, Social, and Governance (ESG) principles may help predict subsequent corporate behavior. [1]  This study provides cautiously optimistic evidence that CEOs who claim to consider the ethical implications …

Sullivan & Cromwell Discusses Banking Agencies’ Request for Information About Bank Relationships with Fintechs

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On July 25, 2024, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (together, the “Agencies”) issued a request for information (the “RFI”)[1] regarding arrangements …

Paul Weiss Discusses Delaware Supreme Court Clarification of Tests for Advance Notice Bylaw Challenges

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Recently in Kellner v. AIM ImmunoTech, Inc., the Delaware Supreme Court clarified the legal tests applicable when stockholders challenge advance notice bylaws. A key aspect of the Supreme Court’s ruling is the importance of distinguishing between a facial and …

Corporate Sustainable Finance

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Sustainable debt financing—bonds issued to support projects that benefit the environment or social welfare—has skyrocketed over the past decade, rising from a niche market to a trillion-dollar business. Public finance has been an essential catalyst for the market for sustainable …

Elon Musk’s Threat

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In the wake of a judicial decision invalidating Tesla CEO Elon Musk’s stock-option package, Tesla’s shareholders have voted overwhelmingly to ratify Musk’s pay. Rather than respect investors’ judgment, however, the lawyers who brought the case claimed that the shareholder vote …

Sullivan & Cromwell Discusses SEC Charge of Internal Accounting Controls Failure Based on Cybersecurity Breach

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On June 18, 2024, the Securities and Exchange Commission (“SEC”) announced charges against R.R. Donnelley & Sons Company (“RRD”) for failure to maintain adequate internal accounting controls in violation of Section 13(b)(2)(B) of the Securities Exchange Act of 1934 (“Exchange …

Dissent Is a Fiduciary Duty

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Many leading companies encourage their employees to dissent, believing that it can enhance organizational learning. When employees disagree with management, they can identify blind spots, counteract groupthink, and generally overcome gaps in understanding. These qualities help spur the innovation and …

Director Independence Reconceived

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Independent directors were originally conceived as guardians of shareholder interests who could safeguard a corporate board’s ability to check management’s power. They have since become a marquee feature of modern corporate governance. What, though, makes a director independent? Scholars, regulators, …

Sullivan & Cromwell Discusses SEC Rule Amendments to Regulation S-P

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On May 16, 2024, the Securities and Exchange Commission (“SEC”) significantly expanded its consumer information protection framework by adopting rule amendments (the “Final Amendments”) to Regulation S-P, which governs the protection of consumer financial information held by broker-dealers, investment companies, …

Sullivan & Cromwell Discusses State Requirements of “Fair Access” to Financial Services

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An increasing number of states have enacted or are considering enacting legislation requiring financial institutions to provide customers “fair access” to financial services. These fair access requirements, first appearing in Florida’s House Bill 3 (2023) (“FL HB 3”), generally prohibit …

Cleary Gottlieb Discusses New York Sovereign-Debt Restructuring Legislation

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The New York State Legislature is again considering a proposed law with potential implications for sovereign debt.  Entitled the “Sovereign Debt Stability Act,” it combines two previous legislative proposals from the 2023 legislative session.[1]  Those proposals sought to: (i) …

Kirkland Discusses Proposed Regulations for Excise Tax on Share Repurchases

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On April 12, 2024, the U.S. Department of Treasury and the Internal Revenue Service published proposed regulations regarding the 1% excise tax on certain stock redemptions and economically similar transactions (corporate “repurchases”) by publicly traded U.S. corporations (“Covered Corporations”) on …

Private Equity Negotiations

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For most of its history, the private equity industry was largely left alone by securities regulators. A basic assumption underlying this approach was that private equity fund investors are sophisticated and should therefore be able to engage in effective private …

Ropes & Gray Discusses Executive Order Limiting Data Transfers to China and Other Nations

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On February 28, 2024, President Biden announced an Executive Order (“EO”) directing the Department of Justice (“DOJ”) to promulgate regulations that restrict or prohibit transactions involving certain bulk sensitive personal data or United States Government-related data and countries of concern …

Arnold & Porter Discusses OCC, FDIC Policy Statements on Bank Merger Scrutiny

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In recent months, the U.S. banking regulators have proposed policy statements focused on providing greater insight on the agencies’ review of bank mergers and acquisitions under the Bank Merger Act (BMA).[1] On January 29, 2024, the Office of the …

Morrison & Foerster Discusses California Plan to Criminally Prosecute Antitrust Violations

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In the latest development signaling California’s increasing efforts to police antitrust violations, on March 6, 2024, Senior Assistant Attorney General Paula Blizzard announced that the California Office of the Attorney General (“California AG”) Antitrust Section is reviving its criminal antitrust …

Wachtell Lipton Discusses AI in the 2024 Proxy Season: Managing Investor and Regulatory Scrutiny

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Corporate disclosures concerning artificial intelligence have increased dramatically in the past year, with Bloomberg reporting that nearly half of S&P 500 companies referenced AI in their most recent annual reports.  And some investors are clamoring for even more, using shareholder …

Kirkland & Ellis Discusses FinCEN Proposal to Increase Anti-Money Laundering Requirements for Investment Advisers

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On February 13, the U.S. Treasury, Financial Crimes Enforcement Network (“FinCEN”) proposed1 (the “Proposed Rule”) to apply affirmative anti-money laundering and countering-the-financing-of-terrorism (“AML/CFT”) program obligations as prescribed by the Bank Secrecy Act (the “BSA…

Paul Weiss Discusses Delaware Chancery Ruling on Controllers’ Fiduciary Duties When Exercising Stockholder Rights

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In In re Sears Hometown and Outlet Stores, Inc. Stockholder Litigation, the Delaware Court of Chancery (in an opinion by Vice Chancellor J. Travis Laster) clarified that, when exercising stockholder rights to alter a corporation’s status quo, controllers owe …

Skadden Discusses Final SEC Rules on SPACs and De-SPACs

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On January 24, 2024, the Securities and Exchange Commission (SEC) adopted final rules that impose significant additional procedural and disclosure requirements on initial public offerings (IPOs) by special purpose acquisition companies (SPACs) and in business combination transactions involving SPACs (de-SPACs). …

Skadden Discusses Manhattan U.S. Attorney’s Office Whistleblower Program for Individuals’ Self-Disclosure

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On January 10, 2024, Damian Williams, U.S. Attorney for the Southern District of New York (SDNY), announced the creation of that office’s Whistleblower Pilot Program (Program). This initiative provides notice of the requirements for individuals who wish to self-disclose criminal …

SEC Commissioner Dissents on Final SPAC Rules

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Today [January 24], the Commission considers a lengthy adopting release of nearly 600 pages that extensively describes numerous disclosure, dissemination, forward looking statement, liability, and accounting provisions purportedly designed to advance investor protection and facilitate capital formation for special purpose …

Cleary Gottlieb Discusses Proposed CFTC Guidance on Voluntary Carbon Credit Derivatives

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On December 4, the Commodity Futures Trading Commission (the “CFTC”) proposed guidance for designated contract markets (“DCMs”) listing voluntary carbon credit (“VCC”) derivative contracts.  The proposed guidance, published to coincide with COP 28, and the opportunity to provide comment will …

Davis Polk Discusses FSOC Revision to Nonbank SIFI Designation Framework

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The Financial Stability Oversight Council revised its interpretive guidance and analytic framework for FSOC’s authority to designate nonbank financial companies for Federal Reserve supervision and regulation and to otherwise monitor and respond to financial stability risks. These changes reverse key …

Morrison & Foerster Discusses Federal Banking Agencies’ Adoption of Climate-Related Financial Risks Guidance

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On October 24, 2023, the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (together, the “Agencies”) released their final Principles for Climate-Related Financial Risk Management for Large Financial Institutions (the …

Debevoise Discusses Proposed FDIC Guidelines for Corporate Governance and Risk Management

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On October 11, 2023, the Federal Deposit Insurance Corporation (the “FDIC”) published in the Federal Register for comment a notice of proposed rulemaking to establish new guidelines (the “Proposed Guidelines”) for governance and risk management at FDIC-supervised insured depository institutions …

Cleary Gottlieb Discusses How U.S. Securities Laws Apply to a Bail-In of UK or European Bank

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On October 10, 2023, the Financial Stability Board (the “FSB”) published a report (the “FSB Report”)[1] that examined the international resolution framework as applicable to global systemically important banks (“G-SIBs”). In its examination, the FSB Report stated that the …

Taxing the Metaverse

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The metaverse has gained popularity following Facebook (Meta)’s announcement that it would bring the “Metaverse” to life and the excitement around cryptocurrency and NFTs. The metaverse acts as a social network where people participate in virtual activities, like purchasing digital …

Skadden Discusses CFTC Charges That DeFi Developers Facilitated Off-Exchange Trading

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On September 7, 2023, the Commodity Futures Trading Commission (CFTC) issued three enforcement settlement orders against developers of decentralized finance (DeFi) protocols.1 The orders charge Opyn, Inc., Deridex, Inc., and ZeroEx, Inc. (0x) with illegally offering leveraged and margined …

Gibson Dunn Discusses Rise of State Laws Restricting Foreign Entities’ Property Acquisitions

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Geopolitical tensions and strategic competition between the United States and China have increasingly influenced the investment landscape in recent years, implicating established regulatory frameworks such as that of the Committee on Foreign Investment in the United States (“CFIUS”), as well …

Debevoise Discusses How EU’s Sustainability Reporting Directive Affects Private Equity

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The EU’s Corporate Sustainability Reporting Directive (“CSRD”) is a new framework that requires companies to include a large body of sustainability information in their annual reporting, in accordance with the detailed European Sustainability Reporting Standards (“ESRS”), combined with external “assurance” …

Wachtell Lipton Discusses Corporate DEI Initiatives After Harvard Affirmative Action Case

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It is no secret that American corporations face vigorous — and often conflicting — demands concerning diversity, equity and inclusion (DEI) initiatives.  Over the past year, DEI initiatives and commitments have come under pressure in the face of macroeconomic headwinds, …

Wachtell Lipton Discusses PCAOB Proposal to Expand Auditors’ Oversight Role

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The Public Company Accounting Oversight Board (PCAOB) has proposed changes to its auditing standards that would significantly expand auditors’ responsibilities and oversight of a company’s noncompliance with laws and regulations.  If adopted as proposed, the rules would require auditors to …

On Corporate Social Issues, U.S. Consumers Do Not Put Their Money Where Their Mouths Are

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Despite an increasing focus on corporations that profit from social injustices and misconduct, governments and international agencies have had limited success in addressing these issues. Advocates for change suggest that stakeholders, particularly retail consumers, could help, given that their purchasing …

Davis Polk Discusses Unsung Provisions of Bill to Hold Bank Executives Accountable

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The Recovering Executive Compensation Obtained from Unaccountable Practices (RECOUP) Act, designed to hold senior executives at banking organizations accountable, has broad and unusual bipartisan support, passing out of the Senate Banking Committee by a 21-2 bipartisan vote. As the bill …

What’s in Your Climate Score?

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An increasing number of consultancies, financial technology firms, data providers, and investment advisory groups offer information about localized physical climate risks like floods, hurricanes, and wildfires. In recent years, mainstream financial services companies have acquired many of the early climate-analytics …

Davis Polk Discusses Delaware Chancery Decision Denying Corwin Cleansing for Defensive Measure

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The recent In re Edgio, Inc. Stockholders Litigation decision highlighted concerns when a public company involved in a business combination adopts defensive measures that would continue for a significant period of time post-closing. The court declined to apply Corwin cleansing …

Mythical Adverse Effect

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The material adverse effect (“MAE”) definition in mergers and acquisitions agreements is one of the most intensely negotiated, litigated, and studied contract provisions ever. It has nearly tripled in average length over the past two decades, as lawyers haggle over …

Sullivan & Cromwell Discusses CFPB Policy Statement on Abusive Conduct

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On April 3, 2023, the Consumer Financial Protection Bureau (“CFPB”) issued a policy statement regarding what constitutes an “abusive” act or practice (the “Policy Statement”).[1] The Policy Statement outlines the CFPB’s approach to analyzing whether an act or practice …