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Cleary Gottlieb Discusses SEC’s Financial Reporting and Accounting Unit Within Enforcement Division
On August 5, 2026, the SEC announced the creation of a new Financial Reporting and Accounting Unit within the Division of Enforcement “to provide the dedicated expertise, focus, and capacity to pursue accounting and financial reporting cases as well as …
Accelerated Share Repurchases, Corporate Governance, and Market Integrity
Can the method of making a share repurchase create a regulatory and governance paradox? In this article, we argue that it can. One increasingly popular mechanism, the accelerated share repurchase (ASR), can at sufficient scale, distort market prices, force the …
Sullivan & Cromwell Discusses Proposed Revisions to Rules on Bank Lending to Insiders
On July 31, the Board of Governors of the Federal Reserve System (the “Federal Reserve”) released a notice of proposed rulemaking (the “Federal Reserve Proposal”) to “modernize” Regulation O, which governs loans by member banks to their insiders (directors, certain …
How Does the SEC Respond to Reputation Shocks?
In April 2010, the Securities and Exchange Commission found itself in headlines no regulator wants. The agency’s Office of Inspector General revealed that 33 SEC employees and contractors had been regularly viewing pornography on government computers during work hours. More …
Shadow SEC Statement No. 12: The SEC’s Retreat from Enforcement (and the Special Case of Mandatory Arbitration Clauses)
Since the Securities Act of 1933, Congress has created and carefully maintained a two-track enforcement system that relies on both public enforcement and private enforcement to prevent fraud and protect investors. Congress has at times adjusted the balance of advantage …
Wachtell Lipton Discusses Delaware Decision Drawing Line Between Expert and Arbitrator in Earnout Disputes
Earnouts, working-capital adjustments, and similar price-adjustment mechanisms in private deals or public company carveouts routinely assign certain disputes to an independent accountant — a device parties favor for speed, expertise, and finality. But a perennial question drags those efficient dispute …
When Is Information Public Under the European Market Abuse Regulation?
The Court of Justice of the European Union (the “ECJ”) recently delivered an important judgment on the interpretation of inside information under Article 7(1)(a) of the Market Abuse Regulation (“MAR”): Brännelius. The judgment addresses what should be understood as …
Has Dodd-Frank Improved or Impeded Swap Markets?
The G-20 nations committed to reform swap markets following the great financial crisis of 2007-08. In the U.S., these reforms were enacted under the Dodd-Frank Act. The interventions began to take effect at the very end of 2012, and new …
Skadden Discusses Second Circuit Decision Expanding Loss Causation Pleading Requirements
Executive Summary
- What’s new: The Second Circuit affirmed dismissal of a securities fraud complaint, expanding loss causation pleading requirements when no immediate price decline follows corrective disclosure.
- Why it matters: The ruling appears to increase lead plaintiffs’ burden and district
Insider Trading in Connected Firms During Trading Bans
Corporate insiders can earn abnormal returns by trading on private information about their firms. Because this informational advantage is especially pronounced before major releases of information—such as earnings announcements—regulators and firms impose trading bans, known in the UK as close …
Sullivan & Cromwell Discusses First DOJ Fraud Declination Under New Corporate Enforcement Policy
On July 29, 2026, the U.S. Department of Justice announced the National Fraud Enforcement Division’s (“NFED”) first declination under Part I of the DOJ’s revised Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”). The NFED declined to prosecute Campus Eye Management …
AI at Work Is a Global Governance Stress Test
Artificial intelligence at work is not merely a productivity story; it is a governance stress test. Unlike earlier waves of automation, which displaced routine, codifiable tasks, contemporary AI reaches into nonroutine, judgment-heavy work—drafting, summarizing, scheduling, retrieving information, maintaining code—the cognitive …
Cleary Gottlieb Discusses Fourth Circuit Decision on Class Certification in Boeing Litigation
The Fourth Circuit recently reversed a grant of class certification in a securities fraud action against Boeing, adopting a rigorous approach for establishing class-wide predominance as to damages. In Office of General Treasurer on behalf of Employees Retirement System v. …
Going Long on Social Impact Prediction Markets
Principles and practices of good corporate governance offer a potentially powerful way to manage uncertainty that is often unrealized. Boards allocate capital based on probabilistic assessments of outcomes they often cannot control. Risk committees price scenarios that may never materialize. …
Wachtell Lipton Discusses Delaware Chancery Decision on Public Benefit Corporations
In resolving a significant issue of first impression, the Delaware Court of Chancery held today that directors of public benefit corporations approving a change-of-control transaction are not required to maximize stockholder value. Drakes Landing Assocs., L.P. v. Tilden Park Cap. …
How the Return of the Shareholder State Affects Corporate Governance
Governments around the world are rediscovering ownership as an instrument of economic policy. From Washington’s industrial policy and Beijing’s state-owned enterprises (SOEs) to sovereign wealth funds across Asia, states are increasingly acting not merely as regulators but as strategic shareholders. …
Lessons from Frontier-Industry Governance
In 2023, an open-source project for managing decentralized autonomous organizations (DAOs) on Ethereum became embroiled in a dispute that raised legal and governance questions for digital assets and decentralized technology. The protocol, called Aragon, had structural traits that are common …
The Case for Breaking Out Labor Costs in Disclosure
In November 2024, the Financial Accounting Standards Board finalized its Disaggregation of Income Statement Expenses (DISE) standard. Beginning in 2028, public firms will have to break out employee compensation from each functional expense item on the face of their income …
401(k) Plans Are a Poor Fit for Private Market Investing
In a recent comment letter, we take issue with a Department of Labor proposal (the “Proposal”) to create a safe harbor that would facilitate large-scale retail investment in private markets through 401(k) plans. While much of the DOL’s analysis …