Enforcement

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We noted in our last Corporate Transparent Act (CTA) update that on February 27, 2025, the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury Department, announced that it would not take any enforcement actions against any company that does not file or update beneficial ownership information required under the CTA until after FinCEN issued a new interim rule.  The Treasury Department announced yesterday that it will not enforce any penalties or fines against “U.S. citizens or domestic reporting companies or their beneficial owners” for not filing this information even after the new interim rule.  Instead, the Treasury Department said that it will issue a proposed rulemaking “that will narrow the scope of the rule to foreign reporting companies only.” Continue Reading Trump Administration Proposes Eliminating CTA Requirements for All U.S. Companies

Amid various ongoing litigation concerning the constitutionality of the Corporate Transparency Act (CTA), the U.S. Financial Crimes Enforcement Network (FinCEN) had announced on February 19, 2025, that it was extending the CTA beneficial ownership information filing deadline for most companies to March 21, 2025 (see Client Alert here).  Now, FinCEN has taken a step further, announcing yesterday “that it will not issue any fines or penalties or take any other enforcement actions against any companies based on any failure to file or update” any reports mandated by the CTA.  According to FinCEN, “no enforcement actions will be taken, until a forthcoming interim final rule becomes effective.”  FinCEN states that it will issue the interim rule no later than March 21, 2025, and the new rule will establish new CTA filing deadlines. Continue Reading FinCEN Pauses All CTA Filing Obligations and Will Issue New Rules

As previously reported (see CTA client alert), on January 23, 2025, in Texas Top Cop Shop v. Bondi, the U.S. Supreme Court stayed an injunction barring enforcement of the Corporate Transparency Act (CTA), but a different Texas trial court’s injunction remained in place.  On February 18, that second court, in Smith v. United States Department of the Treasury, lifted its injunction against CTA enforcement, relying on the Supreme Court ruling.  Oral argument in Texas Top Cop Shop remains scheduled before the Fifth Circuit on April 1, 2025.Continue Reading Remaining Injunction Pausing Corporate Transparency Act is Lifted; FinCEN Extends General Filing Deadline to March 21; Statute’s Future Remains Uncertain

For more insights and analysis from Cleary lawyers on policy and regulatory developments from a legal perspective, visit What to Expect From a Second Trump Administration.

The new administration has recently taken steps to reduce or even eliminate the role of the Consumer Financial Protection Bureau (CFPB) in the supervision of certain financial institutions and the enforcement of federal consumer protection statutes.  While these actions represent a significant departure from the prior administration’s approach to consumer protection, and while a less active CFPB will likely reduce the federal regulatory burden on entities that have been subject to CFPB supervision, consumer financial protection enforcement is not likely to disappear. Instead, it will likely shift to state attorneys general (AG), which had already been active, along with the CFPB, in consumer protection.  This means entities that provide products or services in the consumer finance space will need to continue to be attentive to federal consumer protection statutes (such as the Consumer Financial Protection Act) that can be enforced by states, to state consumer protection statutes, and to state AG inquiries.Continue Reading Consumer Protection Compliance Remains Crucial in Spite of CFPB Work Stoppage

As of our last client update on the Corporate Transparency Act (CTA) litigation (see CTA client alert), the U.S. Supreme Court, in an 8-1 ruling, lifted a nationwide injunction issued by a Texas trial court in Texas Top Cop Shop v. Bondi that had blocked CTA enforcement, but another nationwide injunction issued by another Texas trial court in Smith v. United States Department of the Treasury continued to stall CTA implementation. Now, the new Trump Administration, in its first formal actions related to the CTA litigations, (i) on February 5, filed a notice of appeal and motion to stay the injunction in Smith, and (ii) on February 7, filed a brief supporting the constitutionality of the CTA in Texas Top Cop Shop. Given the Supreme Court’s decision in Texas Top Cop Shop to lift the injunction against CTA enforcement, we believe the government’s effort to stay the injunction in Smith is likely to succeed.Continue Reading Trump Administration Continues Defense of Corporate Transparency Act, Indicates FinCEN’s Flexibility On Deadlines And Scope

The long and winding road of the Corporate Transparency Act (CTA) litigation (as discussed in our most recent CTA client alert) has taken another turn, and this time companies are driving blind. On New Year’s Eve, the U.S. Department of Justice (DOJ) asked the U.S. Supreme Court to lift the injunction imposed by a Texas court and let the law go into effect while the legal contest over the constitutionality of the law is pending. Yesterday, the U.S. Supreme Court resoundingly agreed with the DOJ. In an 8-1 ruling, the nation’s highest Court lifted the stay on enforcement of the statute. One might assume that the Supreme Court ruling ended the injunction issue, but a separate order issued by a different federal judge in Texas blocking enforcement of the statute nationwide remains in place.Continue Reading U.S. Supreme Court Lifts Initial Injunction Against Enforcement Of Corporate Transparency Act, But A Separate Injunction Continues To Halt Implementation 

Introduction

In this three-part series, we discuss recent developments relating to whistleblower programs in the United States (read here). Second, we review whistleblower initiatives in other jurisdictions over the past year (read here). Third, we consider emerging issues and considerations for companies in relation to whistleblower reports.Continue Reading Whistleblowing in Focus: Recent Developments, Emerging Issues, and Considerations for Companies. Part Three: Looking Ahead

The following is part of our annual publication Selected Issues for Boards of Directors in 2025. Explore all topics or download the PDF.

The Securities and Exchange Commission (SEC) and Department of Justice (DOJ) both had active enforcement years in 2024. The SEC’s aggressive focus on crypto enforcement continued, resulting in the filing and continued litigation of several cases in federal courts nationwide. The DOJ announced a number of policy updates in 2024, including guidance related to voluntary disclosures and corporate enforcement, and remained active in the foreign corruption and national security spaces. Finally, both the SEC and DOJ have increased their focus on AI and new technologies, showing increasing concern about the risks associated with AI, with the DOJ issuing guidance on AI in compliance programs and the SEC bringing cases related to misleading marketing about the use of AI in investment strategies. As noted more fully below, with the incoming Trump Administration, enforcement priorities at both SEC and DOJ are expected to shift. The SEC is expected to have a renewed focus on traditional enforcement areas, such as accounting fraud, misrepresentations in securities offerings and insider trading, with significant reductions in enforcement activity related to crypto, cyber incidents and ESG issues. The DOJ is likely to continue its focus on FCPA and national security (including sanctions and export controls), while devoting increasing resources to immigration and violent crime. Additionally, the benefits of cooperation are likely to increase at both the SEC and DOJ, with the potential for reduced penalties for companies able to effectively demonstrate their cooperation and self-remediation.Continue Reading An Active Year in Enforcement, with Changes to Come

Introduction

In this three-part series, we discuss recent developments relating to whistleblower programs in the United States.  Second, we review whistleblower initiatives in other jurisdictions over the past year.  Third, we consider emerging issues and considerations for companies in relation to whistleblower reports.Continue Reading Whistleblowing in Focus: Recent Developments, Emerging Issues, and Considerations for Companies. Part Two: Global Developments

On December 20, 2024, the Securities and Exchange Commission (the “SEC”) adopted amendments to Exchange Act Rule 15c3-3 (the “Customer Protection Rule”) to require carrying broker-dealers with $500 million or more in average total credits to perform the customer and PAB (i.e., proprietary accounts of broker-dealers) reserve account computations and make any required deposits daily, rather than weekly (the “Final Rules”).  Approved by a 4-1 vote,[1] the Final Rules included several changes from the proposed rules, which we discussed in our prior Blog Post.Continue Reading SEC Adopts Rules Requiring Daily Computation of Customer and PAB Reserve Requirements for Certain Broker-Dealers